Pedro Rezek Andery Altran
Lawyer at Marcos Martins Advogados
The focus of this article is to analyze a scenario in which importing companies can reduce their tax burden by using a tax benefit from the State of Santa Catarina.
The import procedure has three stages:
– Administrative: consists of the issuance of the import license by the competent agency;
– Exchange: payment by the supplier in foreign currency;
– Fiscal: which includes customs clearance, through the payment of taxes.
Although there are important procedures in the first two phases, we are going to talk specifically about the Tax Phase, in which the product being imported goes through a process called “nationalization”, at which point it is taxed as if it were manufactured in Brazil, turning the foreign product into a national one.
Import taxes can involve numerous taxes and charges, the main ones being:
– Import Tax (II);
– Tax on Industrialized Products (IPI);
– Tax on the Circulation of Goods and Services (ICMS);
– Social Integration Program (PIS);
– Contribution for Social Purposes (COFINS).
Of these taxes, four are federal taxes, i.e. they have the same rate throughout the country. However, ICMS is a state tax whose rate may vary according to each state’s legislation, and it is this tax that will be the focus of this article.
Constitutional Amendment 33/2001 amended articles 149, 155 and 177 of the Federal Constitution, giving the states and the Federal District autonomy to change the ICMS rates.
As a result, the states, seeking to boost the local economy, grant taxpayers more attractive rates and benefits than other states, thus starting the so-called “fiscal war”.
As a result, companies importing raw materials or finished products choose to carry out this operation in the state with the most attractive tax rates. Among the various states that have a port structure is Santa Catarina, whose taxation and benefits we will now analyze.
The Santa Catarina State Secretariat has developed the Differentiated Tax Treatment Module – TTD, which aims to manage the granting/clearance of Special Regimes related to the payment of tax on imported goods.
Among the benefits are exemption, deferral, suspension, or exemption from or adjustments to compliance with accessory obligations.
The benefits most used by importing taxpayers are regulated by TTD’s 409, 410 and 411, based on certain ICMS benefits, giving importers a competitive advantage when importing.
TTD 409 offers a differentiated rate for importing companies, with the rate required by the state tax authorities varying between 0.6% and 2.6%, depending on the imported product, and the ICMS will be highlighted on the invoice at 4%, with the taxpayer being able to take credit for this percentage.
TTD 410 allows the importer to defer the collection of ICMS until the goods are sold, without the need for guarantees.
TDD 411 is similar to the previous one, but requires the payment of a guarantee.
Another benefit worth highlighting is the possibility of importing from any federal unit, provided that the product originates from countries that are members of or associated with Mercosur, and the goods enter exclusively by land.
Objectively, these are the ICMS benefits granted by the state of Santa Catarina.
In order to use these legal benefits, it is necessary to go through the concession procedure, and of course, the importer must meet certain requirements, such as:
– Head office in the State of Santa Catarina;
– Voluntary contribution to the Special Funds set up by the State of Santa Catarina;
– The goods must be docked in the state of Santa Catarina. Exception to the benefit for Mercosur companies by land;
The benefit is granted individually to each CNPJ and the reductions may vary according to the specific destination of each good.
Every time we talk about ICMS tax benefits, we immediately think of the tax war between states and the possible risks involved in these operations.
Legislation has gone a long way towards regulating the risks of the Tax War through Complementary Law 160/17, creating more flexible rules for forgiving previous debts and reinstating ICMS tax benefits, giving states the opportunity to maintain the benefits for a limited time.
In addition to numerous other rules, the Complementary Law innovated by making it possible to waive/reinstate these benefits without unanimous approval from Confaz. For the approval and ratification of the agreement in question, a quorum of two-thirds of the federated units is required, as long as there is at least one-third approval from the federated units that make up each of the country’s five regions.
Another important point is that states are allowed to join incentive programs drawn up by states within the same region, without needing authorization from Confaz.
States are obliged to report the ICMS tax benefits granted on the National Tax Transparency Portal.
Although the legislation regulating the issue is recent, there is no doubt that there are strong grounds for affirming the increase in legal certainty for ICMS taxpayers, without discarding all the political, supervisory and judicial challenges to pacify this issue, which has already been much debated on the national scene.
The team at Marcos Martins Advogados has extensive experience in tax matters, including imports through the state of Santa Catarina, and is qualified to answer all questions aimed at guaranteeing a company’s maximum performance.
We are therefore available to assist you in this regard or in any matter related to tax law.
