Bolsonaro signs law on ICMS division in trade between states

President Jair Bolsonaro (PL) sanctioned this Wednesday (5), without vetoes, a proposal that regulates the collection of ICMS (Tax on the Circulation of Goods and Services) on the sale of products and services in cases where the final consumer resides. in a different state from where the item originated — in the case of purchases made online.

The law was a requirement of the STF (Supreme Federal Court) to guarantee, from 2022, the collection of tax on sales from producing states to those where consumers are, operations in which electronic commerce stands out.

The bill was analyzed and approved in the Senate by a wide margin of 70 votes on December 20.

The text deals with the transfer of the so-called Difal ICMS, difference in the ICMS rate. Difal has always been widely applied to divide ICMS collection between companies operating in the same state. The new measure regulates the understanding so that it is applied in the distribution of the tax between companies that are in different states.

The adoption of this method of collection tries to balance the distribution of ICMS in the face of the increase in internet commerce, in which a product is produced in one state, but can be stored in a distribution center and sold in other states.

In other words, the idea is that the ICMS collection is not only concentrated in producing states, but can also be shared with states where final consumers are located.

During the process, the author of the project, Senator Cid Gomes (PDT-CE), argued that the regulation was already made through an act of Confaz (National Council of Finance Police), but the STF understood that the regulation should be by complementary law.

According to Confirp Consultoria Contábil, if a product is sold from São Paulo to Bahia, for example, with an ICMS tax rate on interstate operations of 7%, this percentage is due to São Paulo. If the same product in Bahia has a rate of 18%, the seller from São Paulo would have to collect the Difal (11%) for the state where the buyer is, in the Northeast.

The consultancy says that the collection depends on the principle of the exercise prior to the exercise and the novena. For it to be valid from January 1, 2022, it should have been approved and sanctioned by October of last year.

Therefore, there may be a dispute between states and taxpayers regarding the charge this year. The institution assesses that this could lead to the retention of goods at the border of the states and that retailers will have to resort to precautionary measures to ensure that the goods reach the final consumer.

The tax director of the consultancy, Welinton Mota, states that, although the law determines that its effects start within 90 days, counted from the date of publication of the rule, for ICMS the principle of annual precedence prevails. “It means to say that, respecting this last constitutional rule, the production of effects starts only in 2023.”

Until 2015, the Constitution allocated to the state of origin the total amount of ICMS due, in operations and services whose recipient was located in another state and was not a taxpayer.

However, there have been some distortions with the growth of e-commerce that drive the tax war. This occurred because states that function as production and commercialization centers began to centralize ICMS collection, encouraging the granting of tax benefits to attract distribution centers.

​Congress sought to resolve this issue through a 2015 constitutional amendment. The approved text defined that, in online purchases, the state of origin would only be responsible for the interstate ICMS rate, with the destination state having the difference between its internal rate and what has already been charged at origin.

As a result, the units of the federation where the distribution centers of goods for electronic resale throughout Brazil are now prorating the ICMS with the destination states of these goods.