In a judgment session held on September 11th, 2014, the Federal Supreme Court decided that there is no ICMS levy on international leasing agreements whereby machinery and equipment have been imported under the temporary admission regime.
The decision was rendered in the Extraordinary Appeal nº 540829 under general repercussion affecting another 400 suspended cases awaiting this decision. In the case at hand, a Brazilian company leased some pieces of equipment from a foreign company without a purchase option stipulated in the contract. On the occasion of referred equipment customs clearance by means of the temporary admission regime, the Treasury Office of the State of São Paulo demanded the payment of the ICMS tax.
The position adopted by the majority of the Federal Supreme Court Justices was that the ICMS tax collection in international leasing operations is undue, since there is no transfer of ownership of such goods.
Another similar case has also been judged by the Federal Supreme Court in a judgment session held on October 1st, 2014, whose object was the ICMS levy on international leasing of aircrafts. During the judgment session, the majority of the Supreme Court´s Justices, with the exception of the Justice and judge rapporteur Ellen Gracie (retired), understood that the collection of the ICMS tax in leasing operations of aircrafts is undue, since there is no ownership transfer of the goods, and the ICMS taxable event would not occur.
The decisions rendered by the Federal Supreme Court are quite important, since they demonstrate that this must also be the position adopted by the Court as to the discussion for the non-incidence of the ICMS tax on international charter agreements of vessels entered into under the temporary admission regime, with proportional payment of the tax or under the Repetro regime. Ultimately, the legal discussion is the same, no ICMS levy on imports by means of temporary admission.
Lastly, it is worth emphasizing that the court precedents mentioned herein undoubtedly represent an excellent opportunity to recover the taxes by means of a judicial relief seeking (i) to recover the ICMS tax paid for in imports under the temporary admission in the past 5 (five) years, and (ii) non-payment of the tax in future temporary imports.
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