The ministers of the Federal Supreme Court (STF) concluded the judgment of the declaratory appeals in ADC 49, which involves the Government of Rio Grande do Norte and the Presidency, on the evening of last Wednesday (12/4). The judges discussed, among other points, the transfer of ICMS credits after the Court considered that the tax does not apply to interstate transactions involving companies with the same owner. With a score of 6X5, however, it is not possible to know what will be defined as the result of the judgment.
This is because, as JOTA had been warning, the quorum of eight ministers necessary to modulate the effects of the decision was not formed. Therefore, it is not possible to know whether the winning vote will prevail. It is estimated that the ten largest companies in Brazilian retail could lose R$5.6 billion in ICMS tax credits per year if the transfer of these amounts is not authorized.
Most of the ministers agreed with the rapporteur, Edson Fachin, who modulated the effects of the decision taken in 2021 in ADC 49, so that it will only be effective from 2024. The states, within the scope of the National Council for Tax Policy (Confaz), have until next year to regulate the transfer of ICMS credits between establishments with the same owner. If the deadline expires without regulation, the taxpayers' right to transfer the credits is recognized.
According to Fachin's position, administrative and judicial processes pending completion by the date of publication of the minutes of the decision on the merits of the ADC are exempted. Fachin was supported by ministers Cármen Lúcia, Ricardo Lewandowski, Luís Roberto Barroso, Gilmar Mendes and Rosa Weber.
On the other hand, the position expressed by Justice Dias Toffoli, who argued that the regulation on the transfer of credits should be done through a supplementary law, was defeated. The judge, who was followed by Alexandre de Moraes, Luiz Fux, Nunes Marques and André Mendonça, established a deadline of 18 months from the date of publication of the minutes of the judgment of the declaration of appeal for Congress to enact legislation on the subject. From this date, the decision of the STF that removed the incidence of ICMS would also be in force.
Tax experts advocate “middle ground”
The final ruling of the judgment has not yet been recorded in the procedural progress of ADC 49, and it is not possible to know whether the Supreme Court will consider Fachin's vote as the winning one. Tax experts working on the case argue that, since it provides for a shorter modulation period in relation to Dias Toffoli's position, Fachin's understanding could prevail, as it represents a “middle ground” between the two. However, there is no certainty as to whether this will be the understanding of the Supreme Court.
Tax specialist Eduardo Pugliese Pinceli, a partner at Schneider Pugliese, for example, states that there is a consensus among the justices that the decision should not take effect until January 1, 2024. In the final decision, six judges consider that the modulation should take place from that date and five consider that the effects of the judgment should occur 18 months after the publication of the minutes of the judgment of the statement of clarification. In addition, there is a consensus on the right of taxpayers to transfer the credits to other states.
For Pugliese, January 1, 2024 may be a milestone to be considered as a majority for the production of effects of the decision that removed the ICMS in interstate transactions. Even so, the STF may consider that there is no quorum for the modulation of effects, which means that the decision that ruled the tax unconstitutional will produce effects since April 2021 and, furthermore, have retroactive effects, authorizing taxpayers to request the refund of amounts unduly paid in the past, respecting the five-year prescriptive period.
“The situation is uncertain. It is not known exactly when the ICMS should or should not be levied on the transfer and what the taxpayer should do in this situation. It is necessary to wait for the announcement of the result”, says Pugliese.
There is still uncertainty regarding the transfer of credits. Since it does not deal with modulation, would this point be guaranteed as stipulated by Fachin? Tax experts consulted by JOTA argue that it is, but it is not possible to say with 100% certainty, since both modulation and the issue of credits are dealt with in the same section of the rapporteur's vote.
Regarding this point, there are tax experts who argue that, since it is not a modulation, it would not be necessary to reach the quorum of eight votes. Again, only with the proclamation of the result will it be possible to be certain of what was defined by the Supreme Court.
Despite predicting a smaller modulation, Fachin's vote is considered more positive for taxpayers in relation to the vote of Minister Dias Toffoli. This is because Toffoli left the regulation of the transfer of credits in the hands of Congress, providing only that, if the Legislature did not address the issue, the taxpayer would seek the Judiciary. Fachin's position, on the other hand, provides that if the states do not regulate the issue, taxpayers will be able to transfer the credits.