The Brazilian Supreme Court issued a decision on 12 February 2020 concerning the exemption from the contributions for the Social Integration Program (PIS) and the Financing of Social Security (COFINS) on export income.
Under Brazil's Federal Constitution, income derived from exports is not subject to PIS/COFINS). However, the Brazilian tax authority has issued administrative rules that this exemption only applies with respect to direct export, and not indirect exports, which is considered the case for trading companies.
In its decision, the Supreme Court found that no such distinction between direct and indirect exports applies for the purpose of the exemption under the Constitution. According to the Court, the purpose of the exemption is to support the export of Brazilian products, which is achieved whether there is a direct or indirect export. As such, the income of trading companies (indirect exports) is eligible for the PIS/COFINS relief. The decision of the Court is of general repercussion, meaning it must be followed by lower courts in similar cases.