7 ministers are favorable to the incidence of ISS in the software use licensing operations, ensuring competitiveness in the sector and reducing inequality of access in Brazil
This Wednesday (11), the Federal Supreme Court (STF) proceeded with the judgment of ADIs 1945-MT and 5659-MG, reaping yet another vote in favor of the incidence of ISS on software transactions. Now, the result is 7 votes for the unconstitutionality of the ICMS levy against 3 votes in reverse. Subsequently, Minister Nunes Marques, the only one who has not yet voted, asked for a view of the case file, paralyzing the trial.
According to Dr. Saul Tourinho Leal, legal advisor to ABES - Brazilian Association of Software Companies and a lawyer who dedicated himself to the cause, it is necessary to recognize the importance of legal certainty regarding taxation on information technology services as an indispensable factor for leveraging technological innovation through digital transformation, highlighted by the OECD as a way for Brazil to grow.
“In the contemporary world that we live in, very well defined by the Polish sociologist Zygmunt Bauman, as a time that flows through the hands, a liquid time in which nothing is to persist, and like water, everything changes very quickly. Bauman brings the concept of the transformation of a solid world, it is an unquestionable fact that we are in a gaseous world, leading us to periodically review concepts, models and business formats, in which technology, innovation is the central point of all this. A nation will not be competitive if its people do not have quality access to knowledge, education, and technological innovations ”, says Rodolfo Fücher, president of the association.
The majority formed in the Supreme Court understood this changing aspect of the software. Once the trial is over, the segment will continue its transformation, increasing Brazil's competitiveness.
“It is a moment of relief for the sector, since if it were decided to charge ICMS, we would run the risk of increasing the cost of access to technology by Brazilian companies. The digital transformation, which was extremely evident during the pandemic, allows the survival of several economic segments such as industry, food, commerce and even the home office, would be affected ”, explains Manoel Antonio dos Santos, legal director at ABES.
In addition to the importance of the case for the economy, there is the aspect of Brazil's competitiveness in relation to the rest of the world. “There is a proven need to use technology to ensure better performance and certainly greater competitiveness for the Brazilian market. According to a study by ABES / IDC, the expected growth for the IT sector in 2020 is 4% ”, completes the president.
Even with significant progress in improving internet access in Brazil, the OECD points out that, until 2018, 23% of adults had never accessed the network. Speaking of business, just over half of Brazilian companies, with 10 employees or more, had their own website in 2019. In addition, practically 25% of Brazilian students were left without classes throughout the year 2020, further increasing the gap Brazilian social system.
“With the STF's decision against ICMS taxation, we still have the chance to advance digitally in a less unequal way, which is one of ABES 'main objectives, as we will have the opportunity to increase productivity in several sectors of the economy”, points out Fücher.
Overturning of the Veto on the exemption of payroll
The favorable decision on the payroll exemption, with the overthrow by the Chamber of Deputies of Veto nº 26/2020 on the Emergency Program for Maintenance of Employment and Income, on November 4, is also being considered a victory for the segment.
This allows maintaining the option of using the CPRB rate at 4.5% for the IT sector in lieu of a 20% contribution in the total payroll. That is, when the cost of the payroll is high, which normally occurs in the technological segment, it becomes less costly to pay 4.5% on billing.
“Both decisions will bring more foreign investments to Brazil, which were dammed due to the uncertainty of the tax burden for the sector and also due to the cost related to the payroll”, concludes Rodolfo Fücher.
About ABES
ABES, Brazilian Association of Software Companies, aims to contribute to the construction of a more digital and less unequal Brazil, in which information technology plays a fundamental role in the democratization of knowledge and the creation of new opportunities for all. In this sense, it aims to ensure a business environment conducive to innovation, ethical, dynamic and globally competitive, always aligned with its mission of connecting, guiding, protecting and developing the Brazilian information technology market.
Since its foundation in September 1986, ABES has sought to be relevant to its associates and a national and international reference in the technology sector. Currently, the entity represents approximately 2 thousand companies, which total about 85% of the revenue of the software and services segment in Brazil, distributed in 22 Brazilian states and the Federal District, responsible for the generation of more than 208 thousand direct jobs and an annual revenue around 63.7 billion in 2019.
Access the ABES Portal – https://www.abes.org.br or speak to the Relationship Center: +55 (11) 2161-2833.
ABES - Press contacts:
Weber Shandwick Brasil - abes@webershandwick.com
Paula Boracini - +55 (11) 98415-0314
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