The State of Rio de Janeiro has introduced a new tax benefit for the nautical industry. Through Law No. 9,526 of 2021, it authorized the postponement of the collection of ICMS on the purchase and import of machinery, raw materials, and inputs used in the industrial process. The tax will be collected upon the exit of the products, at a rate of 3%, which already includes the 2% for the poverty alleviation fund.
Adherence is still subject to regulation by the State. However, according to tax lawyers, it could be an important incentive for companies and for attracting investments. “[The deferral] was authorized as part of a set of measures that gained momentum at the end of last year to promote the economic development of the sector in Rio de Janeiro and preserve competitiveness in relation to other States,” says Amanda Zaidan, from the Castro Barros Advogados law firm.
The states of Santa Catarina, São Paulo, Minas Gerais and Espírito Santo grant similar benefits. In practice, the state of Rio copied what is already adopted by other entities, a practice known as “cheating” – permitted by Complementary Law No. 160 and by Agreement No. 190 of the National Council for Tax Policy (Confaz), which brings together the country’s state finance secretaries, both from 2017.
“This provides legal certainty for adherence. Companies are concerned about adhering to the differentiated regime and then having a court decision to overturn it,” says Jeniffer Pires Cotta, partner at Kincaid Mendes Vianna Advogados.
The tax expert states that it is necessary to wait for the regulation of the law to be sure whether it is worth entering the differentiated ICMS payment regime. This is because, according to the law, the taxpayer will have to give up any previous tax incentives. Furthermore, says Jeniffer, it is still not clear which activities are covered by the benefit.
“Does it only consider the shipyard or is a Brazilian shipping company also included? We don’t know yet. But it is expected that the concept of the nautical industry will be more comprehensive,” he says.
According to Rio de Janeiro law, the postponement of payment of ICMS applies to machines, equipment, parts, and accessories imported or purchased in Brazil. In the case of imports or interstate purchases, the benefit will only be applied if there is no similar product produced in the State of Rio de Janeiro.
In this case, explains lawyer Amanda Zaidan, the responsibility for collecting the tax will lie with the purchaser. “It must be collected at the time of sale or eventual departure of the respective assets, taking as the basis for calculation the sale value and applying the normal tax rate for the destination of the goods”, she says.
The rule also authorizes the deferral of ICMS on imports or acquisitions within the State of Rio of raw materials, intermediate products and other inputs intended for the industrial process. In this specific situation, the tax will be collected upon the exit of the products, with a rate of 3%, and the use of credits is prohibited. “In practice, the beneficiary waives the calculation of the credits and debits system and applies the 3% on the exit”, says Amanda.
The deferral, however, does not apply to sales made to end consumers who are not taxpayers. In the case of imports, the tax benefit will only be applied if the goods are cleared at ports and airports in the State of Rio de Janeiro.
Companies will still have to present to the Finance Department, annually, the socioeconomic results of the application of the benefit, especially in relation to the generation of employment and income.
The Rio de Janeiro State Finance Department (Sefaz-RJ) informs, in a note sent to Valor, that it is analyzing the necessary procedures and carrying out financial impact studies for the application of the tax benefit. To conclude this work, says the statement, Sefaz-RJ depends on the issuance, by Confaz, of an agreement establishing the differentiated tax regime for the nautical industry along the lines of what is provided for in Law No. 9,526, of 2021.