In its decision of extraordinary appeal No. 540.829/SP (general repercussion), the Brazilian Supreme Court ("STF") , ruled that ICMS (value-added tax) does not apply to imports of goods under the special regime of temporary admission.

As a result, the Rio de Janeiro State Attorneys Office issued the above mentioned circular expressly authorizing its Attorneys to not file appeals, defenses or objections in any legal proceedings discussing solely the applicability of ICMS to imports of goods whose ownership is not changed.

However, we clarify that the law of the State of Rio de Janeiro has not been revoked on this point, and because tax authorities have to comply with the legality principle, some tax auditors continue to assess companies that have not collected ICMS at the time of customs clearance of goods imported under the special regime of temporary admission. In this sense, some companies have chosen to file a declaratory action in order to safeguard their rights.

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Founded in 2001, Tauil & Chequer Advogados is a full service law firm with approximately 90 lawyers and offices in Rio de Janeiro, São Paulo and Vitória. T&C represents local and international businesses on their domestic and cross-border activities and offers clients the full range of legal services including: corporate and M&A; debt and equity capital markets; banking and finance; employment and benefits; environmental; intellectual property; litigation and dispute resolution; restructuring, bankruptcy and insolvency; tax; and real estate. The firm has a particularly strong and longstanding presence in the energy, oil and gas and infrastructure industries as well as with pension and investment funds. In December 2009, T&C entered into an agreement to operate in association with Mayer Brown LLP and become "Tauil & Chequer Advogados in association with Mayer Brown LLP."

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This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.