During a judgment session held on October 8th, 2014, the Federal Supreme Court decided by seven votes to two that the ICMS tax does not make part of the COFINS tax base.

The decision was rendered in the Extraordinary Appeal nº 240785 which despite being an excellent precedent, this decision was rendered only for the benefit of Plaintiff in the lawsuit. The Federal Supreme Court´s final decision will be rendered in a Direct Action for the Declaration of Constitutionality of general repercussion which is currently awaiting the Court´s judgment.

However, even though such decision has not been binding in relation to the other cases, this is an important precedent, since it reflects the prevailing position of the Federal Supreme Court´s Justices on this matter. The same understanding may be applied, for instance, to the Tax on Services (ISS), which represents a possibility to recover the overpaid taxes in the past 5 (five) years, as well as to reduce the amounts to be paid for as of the filing of the respective lawsuit and obtaining of legal decision in this regard.