Approved Supplementary Law exempts ICMS (Value Added Tax on Goods and Services) on the transfer of products between establishments

Por HLB Brasil


In early December, the Chamber of Deputies approved the Supplementary Law Project (PL) proposing the exemption of the Tax on Circulation of Goods and Services (ICMS) for transfers of products between establishments owned by the same company. This measure represents a significant step forward in streamlining and encouraging internal movement of goods.

The PL incorporates the decision of the Supreme Federal Court (STF) regarding the exemption of ICMS in these transactions, reinforcing legal certainty and consolidating the highest court's understanding on the matter. Now, the text will move on to the President's sanction, marking an important step towards its effective implementation.

The project's history dates back to 2017 when the issue was initially judged. However, it was only now, after the judgment of appeals, that the STF defined the rules, establishing that the norms related to the use of tax credits should be regulated by the end of the year. Otherwise, they would be fully utilized by taxpayers starting next year.

The impasse that arose within the National Council of Fiscal Policy (Confaz) led the Senate to address the issue through the PL. It is noteworthy that the text will come into effect in 2024, encompassing the non-incidence of ICMS on the transfer of products to another warehouse of the same taxpayer. This allows the utilization of credits related to previous operations, including interstate transfers to identical CNPJs.

As for interstate ICMS rates, the Bill establishes rates of 7% for operations destined for Espírito Santo, states in the North, Northeast, and Midwest regions, while operations destined for states in the South and Southeast regions (except Espírito Santo) will have rates of 12%.

In cases where there is a positive difference between the state rate and accumulated credits, the originating federative unit of the displaced goods will be responsible for guaranteeing this difference.

The law allows companies to equate this operation to those that generate ICMS payment, enabling the use of credits with state rates in internal operations or interstate rates when moving between different states.

About the tax

ICMS, a state-level tax, applies to the circulation of goods, the provision of interstate and intermunicipal transport services, communications, and electricity, as well as affecting the entry of imported goods and services provided outside the country. Its collection is regulated by each state, within the parameters established by the Federal Constitution and the National Tax Code. The approval of this PL represents a significant step towards simplifying commercial operations and stimulating economic development in the country.



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