In a recent ruling, the 3rd Panel of the Superior Chamber of the Administrative Council of Tax Appeals (CARF) unanimously recognized the right to claim PIS (Social Integration Program) and COFINS (Contribution for the Financing of Social Security) credits on freight expenses for imported inputs used in production. The decision was issued in administrative cases No. 13502.900145/2015-98 and No. 13502.900146/2015-32.

The tribunal determined that freight costs qualify as inputs under the criteria of essentiality and relevance when used in the company’s production line. To be eligible for tax credits, freight must be contracted independently, with its value itemized on the invoice and separate from the transported product.

While shipping charges were recognized, the same ruling denied credit for port expenses related to exports and contracted electricity demand. However, council members expressed differing opinions regarding electricity credits.

Glossary: 

CARF (Administrative Council of Tax Appeals) – a federal administrative court in Brazil responsible for resolving tax disputes between taxpayers and the government. 

PIS (Social Integration Program) – a federal tax in Brazil aimed at funding unemployment benefits and other worker protections. 

COFINS (Contribution for the Financing of Social Security) – a federal tax in Brazil used to fund social security programs.