STF Tema 118 · SPD Advocacia
ISS out of PIS and Cofins: service companies may pay less
In October 2026, the STF (Brazil's Supreme Federal Court) ruled that ISS (the municipal tax on services) is not part of the calculation base of PIS and Cofins (federal contributions on revenue). See whether your company can stop overpaying and claim back what it paid in recent years.
What did the STF decide?
In Tema 118 (RE 592.616), a general repercussion case concluded on October 21, 2026 by 6 votes to 5, the STF held that the amount of ISS is not part of the PIS and Cofins calculation base. ISS only passes through the company's cash and goes on to the municipality, so it is not the company's revenue. The same reasoning was used to exclude ICMS, the state tax on goods (Tema 69).
The STF did not rule on modulation, that is, from when the decision applies and who can claim back what was paid before. According to the STF itself, this point may be examined if motions for clarification (embargos de declaração) are filed. In the ICMS case (Tema 69), the STF set the effects from March 15, 2017, except for lawsuits and administrative requests filed up to that date. For this reason, the review of each case should not wait.
Requirements
Key points
A company that pays ISS on the services it provides.
PIS and Cofins paid outside the Simples Nacional, the simplified regime for small businesses.
As a rule, the last 5 years, unless the STF sets a modulation of effects.
Service invoices, ISS payment slips and PIS and Cofins calculations.
Source: STF, Tema 118 of general repercussion (RE 592.616), judged on October 21, 2026; STF, Tema 69 (RE 574.706), motions for clarification judged on May 13, 2021; CTN (National Tax Code), arts. 165 and 168.
What is your case?
Situations the firm handles
Clinics and laboratories
Healthcare services with ISS on revenue.
STF, Tema 118Builders and engineering firms
Works and projects subject to ISS.
STF, Tema 118Software firms and agencies
Development, marketing and consulting.
STF, Tema 118Providers under presumed profit
Municipal transport, education, maintenance and others.
STF, Tema 118Overpaid amounts
PIS and Cofins calculated on ISS in recent years.
CTN, art. 168Modulation pending
Modulation may still be discussed in motions for clarification.
STF, Tema 118Step by step
How the firm works
- Review. We check the tax regime, invoices, payment slips and tax calculations for the last 5 years.
- Calculation. We show how much may be recovered and how much the company stops paying from now on.
- Filing. Administrative request, tax offset or lawsuit in the Federal Courts, depending on the case.
- Follow-up. Deadlines, decision, offset and receipt of the amounts.
Case review
Let us review your case
Answer the questions, one at a time. At the end you can attach documents, which go straight to a folder in the firm's Drive, and send the summary via WhatsApp. Everything is protected by attorney-client confidentiality.
Common questions
Frequently asked questions
My company is in the Simples. Is it entitled?
In the Simples, taxes are paid together through the DAS (the single monthly payment slip) and the rule is different. The thesis targets companies under presumed profit and actual profit. We review your case.
Can I stop including ISS now?
Modulation may still be set in motions for clarification, and Receita Federal (Brazil's federal tax authority) needs to adjust to the decision. The safest path is to obtain a court decision of your own before changing the calculation.
How much can I recover?
The PIS and Cofins calculated on ISS, adjusted by the Selic rate, within the period the STF allows in the modulation.
What about the tax reform?
PIS and Cofins end on January 1, 2027, replaced by the CBS (the new federal contribution on goods and services). The dispute applies to amounts paid until then.
Do you work with companies from other states?
Yes. Proceedings are electronic and service is online across the country, with headquarters in Anápolis-GO.
How much does it cost?
After the review, the firm sends a written fee proposal, before any engagement.
Lawyer to exclude ISS from PIS and Cofins
SPD Advocacia, based in Anápolis-GO, serves service companies across Brazil, and clients abroad, that want to apply the STF decision in Tema 118, stop paying PIS and Cofins on ISS and recover what they overpaid.
STF Tema 118
The amount of ISS is not part of the PIS and Cofins calculation base, since it is only an inflow that goes on to the municipality.
Time limit to claim
As a rule, recovery covers the last 5 years, unless the STF sets a modulation of effects.
Informational content, in accordance with OAB (Brazilian Bar) Provision 205/2021. Each case depends on a review of the documents, and no result is promised.