PIS/Cofins credits: how to use them within the law
Under the non-cumulative regime, companies may calculate PIS and Cofins credits on certain costs and expenses. Using them correctly depends on a careful analysis of the activity and the legislation.
How PIS/Cofins credits work
Under the non-cumulative regime, the legislation allows a company to calculate credits on certain inputs, costs, and expenses, offsetting them against the amount owed for these contributions. The rationale is to avoid cascading taxation along the chain.
The concept of input
A central point is the definition of input, which tends to consider the essentiality and relevance of the item to the company's activity. The classification depends on the specific case and on the type of operation carried out.
Precautions when using credits
Using them within the law usually requires organization and consistent criteria. Among the common precautions are:
- Document the nature and use of each item
- Verify the tax regime applicable to the company
- Observe items prohibited by the legislation
- Keep calculation records and consistent accounting entries
Risks of improper use
Credits calculated without an adequate basis may be challenged by the tax authorities, generating assessments and penalties. For that reason, a prior analysis of the activity and the legislation tends to reduce risks.
Frequently asked questions
Can every company calculate PIS/Cofins credits?
No. Their use is generally tied to the non-cumulative regime. Companies under other regimes may receive different treatment, depending on the case.
Does any expense generate a credit?
No. The legislation sets out cases and prohibitions, and the concept of input is interpreted according to its essentiality and relevance to the activity.
Need guidance on this topic?
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