Tax on fixed services (ISS) eases the burden on doctors
- Piva Advogados
- Apr 30, 2024
- 2 min read
The 1st Section of the Superior Court of Justice (STJ) unanimously decided, in the judgment of Request for Uniform Interpretation of Law (PUIL) 3608/MG, that uniprofessional medical societies have the nature of a simple company, and not a business company, even if they are set up as a limited liability company.
Therefore, they can calculate the ISS by multiplying the amount owed by each partner by the number of associated professionals, as provided for in article 9, paragraph 3, of Decree-Law 406/1968.
For self-employed doctors, the ISS-Fixed is an annual obligation that varies according to the municipality where the service is provided and is calculated per professional registered with the company and not on turnover, which is more economically advantageous. With the clarification issued by the Court, there is a uniform understanding that "in the provision of medical services, the personal nature of the activity of self-employed professionals, even if they form a company and work with assistants or collaborators, is the justification for the tax benefit".
Below is a hypothetical comparison between the ISS-Fixed and the ISS on monthly turnover based on annual revenue of 1, 2 and 6 million:
Number of Partners | Gross Annual Turnover | Cash value of ISS-Fixed | ISS 5% on annual turnover | Difference between ISS-Fixed and ISS-Billing |
3 | 1 milhão | R$ 3.258,99 | R$ 50.000,00 | R$ 46.742,00 |
6 | 2 milhões | R$ 6.517,98 | R$ 100.000,00 | R$ 93.482,02 |
12 | 6 milhões | R$ 13.143,96 | R$ 500.000,00 | R$ 489.856,04 |
In the case of medical companies, there is a choice between the Simples Nacional regime and ISS-Fixo. Opting for one automatically excludes the other. For those that opt for ISS-Fixo, the tax calculation is based on the number of partners, regardless of monthly turnover.
The decision came after the taxpayer filed a request for a uniform interpretation of federal law, because it disagreed with a decision by the 2nd Appellate Panel of Varginha, in Minas Gerais, which held that the company was a partnership and should calculate ISS by applying the tax rate to monthly turnover.
The company argued that the position differed from that of appeal panels in different states, such as the 5th Panel of the São Paulo Central Public Finance Appeal College and the 1st Mixed Appeal Panel of the Mato Grosso do Sul Court of Justice. He therefore asked the STJ to say whether the regime laid down in Decree-Law 406/1968 could be applied to his situation.
Source: JOTA
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