The Virtual Plenary of the Brazilian Supreme Court finalized, on 04/16 the trial of the Declaratory Action of Constitutionality (ADC) 49/2017, reported by Minister Edson Fachin, filed by the then governor of the State of Rio Grande do Norte, Robinson Faria, which sought the declaration of constitutionality of provisions of Complementary Law 87/1996 (Kandir Law) that provide for the occurrence of ICMS taxable event in the interstate transfer of goods between establishments of the same taxpayer.
The Court unanimously accepted the opinion of the reporting judge, dismissing the request and declaring the unconstitutionality of articles 11, paragraph 3, II, 12, I, in the phrase "even if for another establishment of the same holder", and 13, paragraph 4, of Federal Supplmentary Law # 87 of September 13, 1996.
In his vote, the rapporteur, Justice Edson Fachin, pointed out that if interpreted according to the Constitution of the Republic, the circulation of goods that generates ICMS tax is the legal one, thus understanding that the mere displacement between establishments of the same owner, in the same federated unit or in different units, is not a taxable event for ICMS. This is the consolidated understanding of the Court, guardian of the Constitution, which has been applying it for years and up to the present day.
The Justice continues by affirming that, although some transfers between establishments of the same owner may generate tax reflexes, the interpretation that the merely physical or economic circulation of goods generates a tax obligation is unconstitutional. In drafting the provisions at issue there was, therefore, an excess on the part of the legislator.
To understand the effects on your company's operations, and which paths can be adopted after the declaration of unconstitutionality of the provisions of Supplementary Law 87/96, which require ICMS on the mere transfer of goods between establishments of the same company, please contact us via e-mail:reginaldo@rastaxlaw.adv.br
*On 05/19/2021 this article was updated to inform that the State of RN filed a Motion for Clarification on the judgment of ADC 49, dated 05/13/2021, in summary, to:
a) grant a suspensive effect, so as to suspend the effects of the decision appealed against while the Motion for Clarification is pending examination;
b) grant the motions to:
(i) grant prospective effectiveness to the declaration of unconstitutionality of the articles of the Kandir Law, so as to safeguard the validity of all transactions carried out and not judicially challenged on the date of the judgment of the ADC (04/19/2021), determining the production of effects of the pronouncement of nullity only as from the financial year subsequent to the conclusion of the judgment;
(ii) clarify the scope of the decision with respect to the autonomy of establishments, as provided for in article 11, paragraph 3, II of the Kandir Law, maintaining the rule in the legal system, given its relevance and compatibility with the constitutional text, its application being excluded only in the event of transfer of goods between establishments of the same holder, by means of a partial declaration of unconstitutionality without reduction of the text.
Note: This article is informative and general in nature, and does not constitute legal advice for any specific operation or business. For any additional information, please contact us by e-mail reginaldo@rastaxlaw.adv.br
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Credit: Wix Media
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