On September 21, 2015, the National Finance Policy Council – CONFAZ enacted ICMS Convention No. 93.
The Convention regulates the modifications introduced by Constitutional Amendment No. 87/2015 in relation to ICMS payable in case of interstate purchases made by end consumers that are not ICMS taxpayers.
Therefore, in the transactions contemplated by this Convention, the applicable taxpayer shall:
I – if shipper of goods:
a) use the internal tax rate established by the State of the
recipient of the goods, in order to calculate the total ICMS levied
on the transaction;
b) use the interstate tax rate established for the relevant
transaction, in order to calculate the ICMS payable to the State of
Origin;
c) pay to the State of destination the ICMS related to the
difference between the ICMS mentioned in items "a" and
"b";
II – if a service supplier:
a) use the internal tax rate established by State of the recipient
of the services, in order to calculate the total ICMS levied on the
transportation service;
b) use the interstate tax rate established for the relevant
transaction, in order to calculate the ICMS payable to the State of
Origin;
c) pay to the State of destination, the ICMS related to the
difference between the ICMS mentioned in items "a" and
"b". This payment is not applicable in case the
transportation is provided by, or on behalf of, the supplier (CIF
clause).
The calculation basis will be the amount of the transaction, including: (i) the amount of ICMS; (ii) the amounts equal to: insurance, interest and other amounts paid, received or charged, as well as any conditional discounts granted; (iii) freight, in case the transportation is made by, or on behalf of, the supplier and charged separately.
An additional amount of up to two percent of the ICMS tax rate applicable to the operations and transportation services, for the purpose of financing state and district funds against poverty, should also be considered in the calculation of ICMS, and its payment should comply with the laws of the respective State of destination.
Due to the non-cumulative tax principle, section three of the Convention provides that the credits relating to previous operations and transportation services should be deducted from the debit relating to the tax payable to the State of Origin.
The payment of the rate differences should be made using the Brazilian tax payment slip for State Taxes (GNRE) or other tax payment slip, as provided in the laws of the State of destination. This document should inform the number of the respective invoice and follow the delivery of the good or the supply of the service.
In relation to State Registration with the State of destination, each State of destination may rule whether this registration is required, and a taxpayer that is already enrolled as a the tax substitute with the State of destination is exempted from such registration.
Moreover, in accordance with section nine of the Convention, the taxpayers using the SIMPLES – Simplified tax regime – are also subject to this new rule.
Finally, this Convention comes into force on January 1st, 2016.
Originally published 22 September 2015Visit us at Tauil & Chequer
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.
