Levy seeks support for ICMS reform

In an attempt to overcome the resistance of the Federal Senate, the Minister of Finance, Joaquim Levy, sought support from the governors for a movement to reform the ICMS. Levy called all the country's governors and asked for political support for the approval of the resolution that unifies the ICMS rates, a measure that aims to guarantee the end of the fiscal war between States, a situation triggered by the granting of tax incentives to attract investments companies.

Source: The State of São Paulo (16/07)

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Businessman does not 'pay' for fiscal war.

A recent decision by the Superior Court of Justice (STJ) brings relief and an important precedent for partners and executives of companies criminally prosecuted due to the fiscal war between states. The Court, in a recent decision on the merits, ruled that businessmen cannot be penalized by an economic dispute between States - which seek to attract investments by granting benefits not approved by the National Council for Farm Policy (Confaz).
The case analyzed by the court refers to a criminal action against three partners of Cominas Comercial Minas de Baterias for the charge of crime against the tax order. The penalty in this case ranges from two to five years in prison. “A war was left on the taxpayer's shoulders that is not his own and, worse, with criminal cases”, says Heloísa Estellita, lawyer for the partners in the process and professor at the São Paulo School of Law at FGV.

According to experts, the discussion is a matter of legal interpretation. Taxpayers use a benefit authorized by law in a given state - which, for lawyers, is legal. The State that feels harmed interprets that the reduction or suppression of a tax may have occurred, which would characterize a crime against the tax order. For this reason, some finance departments forward representation to the Public Ministry, which can request the opening of a police investigation and, depending on the results, submit a criminal complaint to the Judiciary. Fact that occurred in the case in question.

The entrepreneurs were denounced by the MP of Minas Gerais because they used ICMS credits from tax benefits in Pernambuco, not approved by Confaz. As Minas Gerais does not recognize this benefit, the State understood that the taxpayer would have appropriated undue credit and paid less ICMS. For the MP, the loss for Minas Gerais would have been R $ 21,8 thousand.

As a defense, the partners claimed to be victims of the fiscal war between Minas Gerais and Pernambuco. "The sale was taxed, the selling company had to point out the value of the ICMS on the sale, but then it did not have to pay it in full to the State of Pernambuco", says Heloísa, who recalls that the incentive is still in force.

At STJ, Cominas maintained that the tax credit it took would be legitimate because it comes from a tax benefit granted to the company from Pernambuco by the State. Being legitimate, there could be no talk of suppressing taxes. In addition, there would be no record that the invoices mentioned in the complaint were false. In that sense, there would be no crime.

The rapporteur at STJ, Minister Gurgel de Faria, dismissed the allegation of false document and crime. For him, the use of ICMS credit due to differences in interstate rates, without tax fraud, has no criminal repercussions. The 5th Panel's decision was unanimous for the closure of the criminal action. "The taxpayer who pays the tax in compliance with the constitutional principle of non-cumulativity cannot be charged with the practice of tax crime, as well as maintaining bookkeeping fidelity, within the rules valid within the scope of the respective entities of the Federation," he said.

Source: Valor Econômico (14/01)

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“Fiscal war between states hinders ICMS reform”, says Levy

Joaquim Levy, new Minister of Finance
Joaquim Levy, new Minister of Finance

A fierce federative dispute could mark the Senate's examination of the reform of the Tax on Circulation of Goods and Services (ICMS), announced as one of the government's priorities by the new Minister of Finance, Joaquim Levy, at the ceremony for the transfer of office, at Monday (5).

Initially proposed by President Dilma Rousseff, in the Senate Draft Resolution (PRS) 1/2013, the gradual unification of interstate rates has been discussed for two years by senators, with four public hearings and several meetings of the Committee on Affairs Economic (CAE).

Although the commission approved a substitute, in May 2013, several points of the proposal, such as the exceptions to unification and the compensation of losses with the change, divided the parliamentarians. The matter is now being processed by the Regional Development and Tourism Commission (CDR).

The formula then found - increasing the number of rates and not unification - displeased the government, which dropped the Provisional Measure (MP) 599/2012, one of the points on which the reform was based. It established two funds: one to compensate for the loss of revenue resulting from unification and the other to fill the post-fiscal war scenario, a regional development policy.

The other point of the tripod was the validation of tax incentives granted unilaterally by the states involved in the fiscal war. Without the vote to unify the rates, the validation did not succeed in the proposal initially sent by the Executive, which passed through the Chamber of Deputies as the Complementary Law Project (PLP) 238/2013 and, in the Senate, as PLC 99/2013. It remained in the project, which became Complementary Law 148/2014, only the part that deals with the refinancing of the debts of the states.

Convalidation becomes necessary in the face of repeated decisions by the Supreme Federal Court considering the tax incentives granted by the states without the unanimity of the National Council for Farm Policy (Confaz) to be unconstitutional. The requirement is provided for in Complementary Law 24/1975, which regulates the agreements for exemption or reduction of ICMS rates.

In the speech of job transfer, Joaquim Levy defended a reform that discourages the fiscal war. According to him, a change that at the same time reduces the tax rates at source and eliminates the legal risks of the incentives already granted will favor the resumption of incentives in the states.

Source: Congresso em Foco (06/01)


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Starting in the legislature, the end of the Fiscal War is possible.

By Evandro Guimarães, President of ETCO

The parliamentary recess is approaching, but there is still an expectation that the Senate will vote this year on a bill that helps in the effort to end the fiscal war between states. Those who defend the approval recall that the new governors will be able to take office on January 1 with a new orientation, which can help a lot in the development of the country as a whole.

The expectation comes from November 4, when the Senate Economic Affairs Committee (CAE) approved the fifth substitute presented by Senator Luiz Henrique (PMDB-SC) to the original project of Senator Lúcia Vânia (PSDB-GO), PLS130 / 14. The substitute authorizes the National Council for Farm Policy (Confaz) to validate the tax incentives granted to States, even without unanimous decision, as required today.

Senator Luiz Henrique's substitute avoids the risk of unconstitutionality of the bill presented in April (PLS 130/2014), by Senator Lúcia Vânia (PSDB-GO) and predicts that an agreement for the validation can be signed with the support of two thirds of the federated units and one third of the federated units in each of the five regions of the country. The change in quorum applies only to the validation of tax incentives, forgiveness of tax credits arising from disputes between States and eventual reinstatement of benefits.

This approval is the initial step towards pacifying the issue of tax incentives through legislation. ETCO defends the immediate mobilization of parliamentarians for the end of the fiscal war, as the solution must be sought in Congress, where an agreement is possible, with concessions between the interested parties, as was the case in CAE.

The vote on PLS 130/14 can avoid the resolution of the fiscal war by the Federal Supreme Court (STF). The Supreme Court has already ruled in 29 Direct Unconstitutionality Actions (ADIs) that incentives granted without the consent of Confaz are unconstitutional and may place the Binding Summary Proposal 69 on the agenda. The text considers the ICMS tax incentives granted without prior unanimous approval to be unconstitutional. do Confaz. If the Binding Summary is edited, all the organs of the Judiciary and the direct and indirect public administration, at the federal, state and municipal levels, are obliged to adopt this consolidated STF orientation.

This situation - of a bill pending in the Senate and a binding summary that can be edited - causes legal uncertainty that results in paralysis of investments in the country. clear for future incentives, companies have left projects aside.

Shortly after approval by the CAE, the Confaz Coordinator, José Barroso Tostes Neto, stated that the agreement to vote on the substitute was possible because the government was willing to start discussions for the reform of the ICMS. The creation of Regional Development and Compensation Funds is essential to compensate for losses by States.

The path of the new federative pact is outlined and the first step has been taken. It remains to advance the approval of the text that legalizes the tax incentives created by States and the Federal District and, subsequently, the ICMS unification projects and the creation of funds, so that the instruments to stimulate development are all aligned.

Evandro Guimarães, CEO of ETCO
Evandro Guimarães, CEO of ETCO



Lúcia Vania asks government collaboration to solve Fiscal War

Senator Lúcia Vânia (PSDB-GO) regretted information that the government would like to postpone voting on a bill of her own that regulates tax incentives granted by states to attract investments (PLS 130/2014). She explained that the proposal, approved earlier this month by the Economic Affairs Commission (CAE), aims to offer a definitive solution to the fiscal war; ensure legal security for states and companies; and prevent the problem from being resolved by the Supreme Federal Court (STF). The proposal, according to the senator, also opens the way for other discussions of tax reform.

(Source: cenariomt.com.br - 21/11/2014)

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Tax incentives: STF gives deadline for regularization and may create gap for other cases

In view of the impasse of the Federal Senate on the rules of the current tax incentives, the Supreme Federal Court (STF) analyzes questions regarding the benefits. At the beginning of the month, the STF plenary set a precedent for regularizing incentives that do not meet the legislation. In this case, the ministers concluded that the benefit was illegal, but gave the State of Ceará a year to promote the legalization of the rule, which established special conditions for companies that employ physically disabled people.

(Source: seculodiário.com.br / 20-11)

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Rio de Janeiro requires ICMS difference from salt refining industries

The Rio de Janeiro State Government issued a decree that obliges the salt refining industries to redo the ICMS tax bookkeeping the past five years. The rule was published after the unappealable direct action of unconstitutionality (Adin) No. 3.664, which revoked the tax benefit granted to the sector.

With the edition of the standard, taxpayers will have to pay all the tax that is no longer collected. Lawyers fear the measure will be applied in other similar cases.


Source: Portal Contábeis - 10/11/2014

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Senate approves validation of state tax incentives

The CAE (Senate Economic Affairs Commission) approved on Tuesday (4) the validation of tax benefits granted by States to attract investments, within the so-called fiscal war. The text must be voted on in the House plenary this Wednesday (5), and then go to the Chamber of Deputies.

The bill aims to maintain incentives related to ICMS (Tax on Circulation of Goods). To this end, they will be revalidated based on new legislation that changes the quorum for approval of these benefits.

The STF (Supreme Federal Court) has already decided that they can only be granted by unanimous decision of Confaz (National Council for Farm Policy), an organ that brings together the state finance secretaries.

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