The Federal Constitution instituted the Financial Compensation for Mineral Exploitation (CFEM) – more commonly known as "mining royalties" – as a consideration for the economic use of mineral resources (Union assets) to be collected by the National Mining Agency (ANM).
Currently, its collection is not only up to the holders of mining rights that carry out the mining activity, as originally conceived, but, more specifically:
- to the first purchaser of mineral extracted under the small scale mining consent;
- the purchaser of mineral auctioned off at public auction; and
- to those who exercise, for consideration or free of charge, the activity of exploitation of mineral resources on the basis of the rights of the original holder.
The current regime, introduced by Law 13,540/17, lists distinct situations that represent the taxable event of CFEM, based on the wording given to items I to V of article 2 of Law No. 8,001/90, all of them related to the exploitation of mineral resources.
Among these hypotheses, in two of them the amount due is calculated directly on the result of the commercialization of the production of the mining companies. This is what is provided for in items I and III, which determine the collection on the revenue from the sale and export of mineral production. [1]
In both cases, CFEM ends up following a typical methodology of indirect taxes that act on trading activities. Although it is not a tax, but a public price,[2] the collection is also calculated on revenues, causing its economic effect on the sale price of the production.
In fact, the mechanics of tax charges that affect sales, whether of a tax nature or not, tend to obey a pattern, in which the value destined for the public treasury ends up being incorporated to the product price and borne by the purchaser.
The similarity between the institutes is also revealed to the extent that the legal entity responsible for CFEM acts as a kind of intermediary between the collecting agency (ANM) and the purchaser, since the amount of the charge, initially received by the mining company, is subsequently transferred to the public entity, not being incorporated into the company's assets.
The systematics described above leads to the reflection on whether CFEM could be considered part of the revenue of the explorer of the mining company or if it would be a simple cash inflow, as ICMS was interpreted by the Federal Supreme Court (STF) in the judgment of Extraordinary Appeal 574.706, which resulted in the thesis of removal of ICMS from the calculation basis of PIS and Cofins.
On that occasion, the ministers recognized that the state tax would represent only a transitory cash inflow, to be transferred to the public entity, which is the final receiver of the cash. Therefore, it would not represent an equity income capable of generating revenue and, therefore, it was understood by the impossibility of composing the calculation basis of federal contributions.
As is well known, the prevailing legal understanding served as a basis for the emergence of subsidiary theses, or "offshoots", which claim the exclusion of other items from the calculation basis of PIS and Cofins. There are cases, for example, of judgments of the Federal Court of São Paulo[3] and the Federal Regional Court of the 3rd Region,[4] who admitted the exclusion of PIS and Cofins from their own basis, based on the line of rationale established in the Theme 69.
In this context, it seems appropriate to argue that, similarly to ICMS and other indirect taxes, CFEM does not constitute revenue of those who receive it, since these resources remain for a certain time in the possession of the individual and then are transferred to the treasury, which appropriates them definitively.
In addition, the requirement of PIS and Cofins on CFEM can be interpreted as a double burden imposed on mining companies that, in addition to the consideration for ore exploitation, would be subject to an increased tax burden.
Therefore, in our view, there is good evidence to support the exclusion of that item from the calculation basis of PIS and Cofins due by the companies exploiting mineral resources. In this scenario, it is observed that mining companies obliged to pay CFEM may, in given circumstances, seek alternatives to mitigate the tax impact by judicially questioning the obligation of this charge.
[1] Art. 2 The CFEM rates shall be those listed in the Annex to this Law, subject to the limit of 4% (four percent), and shall incur: (Wording given by Law 13.540, of 2017)
I - in the sale, on the gross revenue of the sale, less the taxes levied on its commercialization; (Included by Law 13,540, of 2017)
(....) III - in exports, on the calculated revenue, considered as calculation basis, at least, the parameter price defined by the Brazilian Federal Revenue, based on article 19-A of Law 9,430, of December 27, 1996, and in the complementary legislation, or, in the event of non-existence of the parameter price, the reference value shall be considered, subject to the provisions of §§ 10 and 14 of this article; (Included by Law 13,540, of 2017) Term
[2] As reaffirmed by the jurisprudence of the Supreme Court, most recently in ADI 4.146, of October 9, 2019.
[3] Writ of Mandamus 5003772-59.2021.4.03.6100, judged by the 14th Federal Civil Court of São Paulo, on August 11, 2021.
[4] TRF 3rd Region, 4th Class, ApReeNec - Appeal / Reexamination required - 5022842-67.2018.4.03.6100, rel. federal judge Andre Nabarrete Neto, judged on December 19, 2019, summons via system. Date: January 20, 2020
[5] Art. 3 From the amount calculated in the form of article 2 the legal entity may deduct credits calculated in relation to: (...) I - goods acquired for resale, except in relation to the goods and products referred to: (...) II - goods and services, used as inputs in the provision of services and in the production or manufacture of goods (....) §1 Subject to the provisions of § 15 of this article, the credit shall be determined by applying the rate provided for in the caput of article 2 of this Law on the value: I - of the items mentioned in items I and II of the caput, purchased in the month;
[6] According to the rules of article 3, paragraph 2, II, of Law 10,833 and article 3, paragraph 2, II, of Law 10,637/02.
[7] Appeal/Remittance Required – 08173623420204058300. Organ: Federal Regional Court of the 5th Region. Rel., Federal Judge Marcos Antonio Garapa De Carvalho (summoned). Tried July 20, 2021.
