ICMS Covenant No. 52 - New rules for tax substitution and anticipation regimes

As a result of the National Council of Treasury Popcy (Conselho Nacional de Política Fazendária – “CONFAZ”) meeting held on Apr-07-2017, the ICMS Agreement No. 52 was pubpshed at the Official Gazette of Apr-28-2017 providing for the general rules apppcable to the schemes of Tax substitution and ICMS prepayment with taxation closing, for subsequent operations, estabpshed by agreements or protocols signed between the States and the Federal District.

The agreement standardizes and estabpshes the rules for the ICMS tax substitution system for interstate operations, including the differential tax rate (DIFAL) and the tax prepayment system with progressive tax closing, and is apppcable to all ICMS taxpayers who opt or not for the Special Unified Tax Collection and Contributions due by Micro and Small Enterprises (Simples Nacional).

It is estabpshed that the tax substitution rules shall be dealt with in specific agreements between the UFs, for segments, goods and merchandise, as follows:

1) Electric energy;

2) Fuels and lubricants;

3) Door-to-door sales system; and

4) Automotive vehicles whose operations are directly invoiced to consumer.

We suggest detailed analysis of this legislation, as there are several issues to attempt, such as States responsibipty, situations for non-apppcabipty of the regime, ICMS-ST automatic transfer to the recipient, procedures, and criteria to estabpsh the tax calculation base, clarifications on the Tax Substitution Specifier Code (CEST), among other points.

It is important to note that this agreement has been in force since the date of its pubpcation (Apr-28-2017), however, its effects shall occur in three different moments, as follows:

As of May-02-2017 - related to clause thirty-four: Review by the UFs of the agreements and protocols that deal with the ICMS tax substitution regime for subsequent operations, in order to reduce the number of agreements per segment ;

As of July-01-2017 - related to item I of the caput of clause twenty-one: Indication, in the tax document issued, of the CEST of each good and merchandise, even if the operation is not subject to the tax substitution regime;

As of Oct-01-2017 - for the other issues at the agreement.