The form of ICMS (Value-added tax on sales and services) credit in transfers between establishments under the same ownership has been defined

On October 7, 2024, ICMS Agreement No. 109/2024 was issued, regulating the transfer of credits from the Valued-added tax on Sales and Services (ICMS) in the event of interstate operations with goods destined of the same ownership.

This Agreement arises from the decision of the Supreme Court (STF), with general repercussion, in Declaratory Action of Constitutionality No. 49 (ADC 49), which consolidated the understanding that ICMS is not levied on the transfer of goods between establishments of the same taxpayer, since such movement does not constitute circulation of goods for tax purposes, requiring the transfer of ICMS credits between the originating and destination establishments.

The Agreement 109/2024 adapts the rules for transferring ICMS credits to the current regulations set forth in Complementary Law 87/1996 (Art. 12, II, §4).

Main rules set out in ICMS Agreement No. 109/2024

1. Credit calculation, calculation basis and form

The credit to be transferred is limited to the result of applying percentages equivalent to the interstate ICMS rates on the cost values of the goods in stock on the transfer date, and the resulting credit amount must be included in the value of the goods.

The credit transfer must occur through the issuance of an invoice, highlighting the ICMS, and it shall comply with the rules pertaining to the issuance of tax documents related to interstate transactions, without prejudice to the application of specific rules established in the relevant legislation.

2. Credit transfer by tax option

Alternatively to the method mentioned above, the taxpayer may choose to treat the transfer of goods as a transaction subject to a taxable event for all applicable purposes.

In this case, the value of the transaction for determining the ICMS tax base will be, in summary, (a) the value corresponding to the most recent entry of the good (resale) or, (b) in other situations, the cost of the produced merchandise, understood as the sum of the cost of raw materials, secondary materials, labor, and packaging.

This option will apply to all the taxpayer's establishments located in the national territory and will be recorded in the Document Usage Log and Occurrence Book of all the establishments of the same owner.

In this type of transfer, the Invoice must include, in the 'Additional Information' field, the following statement: "transfer of goods treated as a taxable operation, pursuant to § 5 of Article 12 of Complementary Law No. 87/96 and clause five of ICMS Agreement No. 109/24".

The option will be annual, irrevocable for the entire calendar year, and must be registered by the last day of December to take effect from January of the following year

For the year 2024, the option must be made by the last day of the month following the month of issuance of this agreement (i.e., by November 29, 2024), and the effects will take place starting from November 1, 2024.