PIS and Cofins Credits on Employee Benefits: New Contours of the Input Concept and Opportunities for Companies

The Evolution of the input discussion under the non-cumulative regime

The non-cumulative PIS and Cofins regime allows for the deduction of credits linked to costs, expenses, and charges used in a company’s activities, as provided in Articles 3 of Laws No. 10,637/2002 and No. 10,833/2003. The purpose of this mechanism is to prevent the accumulation of contributions along the economic chain, enabling taxpayers to offset part of the taxes paid in previous stages with credits arising from expenditures necessary for the development of business activities.

Despite this economic logic, the administrative interpretation historically adopted by the Federal Revenue Service (Receita Federal) restricted the concept of “input,” limiting the right to credits to items directly applied in the production of goods or provision of services. This understanding was consolidated in administrative norms, such as Normative Instruction RFB No. 2,121/2022, later amended by Normative Instruction RFB No. 2,264/2025.

The STJ position and the criteria of essentiality and relevance

A key milestone in this discussion occurred with the judgment of Topic 779 by the Superior Court of Justice (STJ) (REsp No. 1,221,170/PR). On that occasion, the court established parameters for interpreting the concept of input under the non-cumulative PIS and Cofins regime, determining that the concept should be interpreted more broadly and aligned with the economic reality of business activities, moving away from the automatic application of criteria used in IPI legislation.

According to the STJ’s consolidated understanding, the characterization of a good or service as an input should primarily consider two criteria:

• Essentiality: when the good or service is indispensable for the taxpayer’s economic activity or for the execution of the production process or service provision.

• Relevance: when the item, although not strictly indispensable, is important for the quality, safety, regularity, or feasibility of the economic activity.

Based on this jurisprudential understanding, the possibility of crediting certain personnel-related expenses began to be discussed, particularly when directly linked to the company’s productive activity or service provision, especially when such expenditures arise from obligations imposed by collective labor agreements or are essential to conducting business activities.

Employee benefits and the debate on the right to credit

In this context, discussions emerged regarding whether certain expenses related to benefits granted to employees could be considered inputs for the purpose of PIS and Cofins crediting, especially when directly linked to productive activity or service provision.

In various economic sectors, benefits such as meals, uniforms, medical assistance, and other allowances are established in legally binding collective agreements, recognized under Article 7, XXVI, of the Federal Constitution. In such cases, these expenses represent necessary costs for the company to maintain regular operations and comply with sectoral labor conditions.

From this perspective, it is argued that these expenditures may meet the STJ-defined criteria of essentiality or relevance for the characterization of inputs under the non-cumulative contributions regime.

Furthermore, since the administrative prohibition established in Normative Instruction RFB No. 2,121/2022 was recently amended by IN RFB No. 2,264/2025, the matter is still in the early stages of jurisprudential consolidation, leaving room for the evolution of judicial understanding.

Recent precedent reinforces the discussion

The discussion gained renewed momentum with a preliminary ruling issued in Writ of Mandamus No. 5004629-49.2026.4.02.5101, pending before the 1st Federal Court of Rio de Janeiro.

In the ruling, the plausibility of the right to utilize PIS and Cofins credits on expenses related to employee benefits, such as meals, clothing, and health plans, was recognized when such benefits result from collective labor agreements.

The court held that the prohibition set forth in Article 176, §2, VI, of Normative Instruction RFB No. 2,121/2022, as amended by Normative Instruction RFB No. 2,264/2025, could not generically restrict the concept of input, particularly when the expenses arise from obligations imposed on the employer by labor regulations.

Additionally, it was emphasized that the restrictive interpretation adopted by the Federal Revenue could violate the principle of tax legality and contradict the understanding consolidated by the STJ in Topic 779.

Consequently, a preliminary injunction was granted, ordering the Federal Revenue Service to refrain from applying the administrative prohibition, provisionally recognizing the right to utilize PIS and Cofins credits on such expenses until a final decision in the case.

Although not yet a definitive decision, this precedent strengthens the discussion on the scope of the input concept and may serve as a relevant basis for analyzing opportunities to recover tax credits by companies.

Final considerations

The discussion regarding the crediting of PIS and Cofins on employee benefits highlights a recurring tension between the restrictive interpretation adopted by the Federal Revenue and the interpretation more aligned with the economic reality of business activities consolidated by the STJ.

As new judicial precedents emerge, it is likely that the understanding of the scope of the input concept will continue to evolve, especially regarding expenses that represent necessary costs for the regular operation of companies.

Furthermore, since the administrative regulation reinforcing the prohibition on crediting these expenses is relatively recent, the topic is still in the process of being consolidated in the courts, with new precedents likely contributing to the evolution of understanding on the matter.

In this context, a careful analysis of mandatory labor expenses and their relationship to economic activity can represent an important opportunity to review contribution calculations and identify potential tax credits.

Text drafted and published by Giovanna Diniz and Paula Flores