The TJSP (São Paulo Court of Justice) issued an unprecedented decision that authorizes the transfer of goods to the same company's establishment throughout the national territory without the incidence of ICMS (Tax on Circulation of Goods and Services), even when in the previous, internal transactions, there was a deferral of ICMS.
The understanding respects the decision of the Supreme Federal Court (STF), which established that there is no tax incidence on transfers within the same company – parent company subsidiary/ subsidiary parent – even if located in different states. The states were preventing the circulation of goods when, in internal operations, antecedents, there was ICMS deferral. In some cases, goods were being seized at the checkpoints and the requirement of paying the previously deferred ICMS as a condition for releasing the cargo.
Lawyers Joaquim Rolim Ferraz, Ubaldo Juveniz Jr and Rangel Fiorin, partners in the Tax area of Juveniz Jr Rolim Ferraz Advogados Associados, explain that the States were contradicting the STF ruling that ensured the free circulation of goods between establishments of the same company, without the incidence of ICMS, throughout the national territory, by issuing a notice of violation, when in the previous internal transactions there was a deferral, a postponement of the moment for payment of ICMS, that is, they were creating obstacles to the free circulation of products.
“We had been fighting this with specific cases. Now, we have obtained a decision ensuring the circulation of goods, complying with the STF’s understanding that it is not applicable, even when there was deferral in previous transactions. There are a huge number of companies with this problem today, both in retail and in industry,” says Ferraz.
