Social contributions PIS and Cofins levied on the sale of ownership interest
By Marcelo Tendolini Saciotto and Rodrigo Lara
One of the central topics addressed by Provisional Measure (local acronym MP) 651/14 is how social contributions PIS and Cofins are levied on the sale of ownership interest by companies whose corporate purposes are holding interest in other companies and trading shares or quotas of such companies.
Starting in 2015, the social contributions PIS and Cofins levied on the revenue from the sale of ownership interest by companies such as the ones mentioned above will be calculated according to the cumulative regime. However, instead of using the aggregate rate of 3.65% – as currently applicable – the federal government decided to increase the rate to 4.65% (0.65% as PIS and 4% as Cofins.)
In addition, the MP allows that the company excludes from the tax base the amount relating to the purchase of the ownership interest. Therefore, the PIS and Cofins will only be levied on the difference between the cost and the revenue from the sale. In other words, they will levy on the ‘capital gain’ only.
It is important to note that the new rule does not apply to companies that do not list as their corporate purposes the trade of ownership interest and, for that reason, do not record such assets as current assets according to the accounting rules in force. In this case, the rule is to exclude the revenue from the sale of ownership interest from the tax base used in calculating PIS and Cofins.
It is noteworthy that, as a general rule, PIS and Cofins will not levy on holding companies. This is because, according to the accounting rules in force, an asset must only be recorded as current asset if the company intends to trade such asset within no later than 12 months after the date of the balance sheet.