Non-taxation by PIS and COFINS of Debt Forgiveness Granted to Legal Entity

Abstract

This article intends to analyze the assessment of Social Insurance Contributions, denominated PIS and COFINS, on the revenue arising from debt forgiveness registered by debtor legal entity considering the events of levy of these contributions, current legal rules applied, as well as administrative and judicial precedents about this subject, analyzing the concept of revenue for tax purposes.
The theme is divergent in the legal environment and is far from having the discussion closed and, although the administrative case law is mostly favorable to the incidence of PIS and COFINS because it understands that the applicable laws do not expressly exclude taxation in relation to the debt forgiveness, there are precedents both in the administrative and judicial levels that, based on the concept of revenue already delimited by the Supreme Court and defined by the doctrine, exclude taxation precisely because the accounting revenue from debt forgiveness does not represent a positive income that increases the taxpayer’s equity.