STF modulated the effects of the decision that removed ICMS from transactions between establishments of the same legal entity

The majority of the Supreme Court Justices ruled that the decision handed down in ADC 49, which removed the ICMS levy on transactions between establishments of the same legal entity, will take effect from 2024. Furthermore, taxpayers will be able to maintain and transfer ICMS credits to other states also next year, but it will be up to the states to regulate the matter.

Minister Edson Fachin’s understanding prevailed, stating that states, under the auspices of the National Council for Tax Policy (CONFAZ), have until next year to regulate the transfer of ICMS credits between establishments of the same legal entity. If the deadline expires without regulation, taxpayers’ right to transfer the credits is recognized.

In other words, states will continue to collect ICMS on interstate transactions until the end of this year. This situation does not apply, however, to taxpayers with a favorable administrative or judicial decision, who, in addition to not paying ICMS on these transactions, will also be entitled to a refund of the amounts unduly paid.