Tax Law Highlights | Theme 1367 of General Repercussion and the ICMS Tax on the Transfer of Goods Between Establishments of the Same Taxpayer

UPDATES IN EVIDENCE

On February 4, 2025, the Supreme Federal Court (STF) concluded the judgment of Theme 1367 (leading case RE No. 1,490,708) under the General Repercussion system. The focus of the judgment was to define the effects of the modulation on the incidence of ICMS (Tax on Circulation of Goods and Services) concerning the transfer of goods between establishments of the same taxpayer, as outlined in Theme 1099/RG and ADC 49.

To understand the impact of the decision on operations between establishments of the same taxpayer, it is important for the taxpayer to be aware of the history of the jurisprudence on the topic, as well as the points reaffirmed by the ruling issued.

INTRODUCTION AND TAX LANDSCAPE

First, to contextualize the thesis established in the judgment of Theme 1367, it is crucial to consider the prior understanding set by the STF in the judgment of Declaratory Action of Constitutionality (ADC) 49.

To provide context, on April 29, 2021, the STF concluded the judgment of ADC 49, in which it established the thesis that the movement of goods between establishments of the same taxpayer does not constitute the triggering event for the incidence of ICMS, even if it involves interstate circulation.

Declaratory Appeals were filed by the State of Rio Grande do Norte, and on April 19, 2023, by a majority vote, the Court consolidated the understanding that the substantive decision would have prospective effects starting from the 2024 fiscal year, except for pending administrative and judicial processes up to the date of the publication of the judgment's minutes. The states were required to regulate the transfer of ICMS credits between establishments of the same taxpayer.

As for Theme 1367, the discussion originated from a request by the taxpayer to exclude the ICMS charge on operations involving the transfer of goods between the parent company and its branches, i.e., establishments of the same taxpayer, occurring up until December 31, 2023, without any pending judicial or administrative processes as of April 29, 2021.

The Special Appeal filed by the State of São Paulo argued that the decision rendered by the São Paulo State Court (TJSP) contradicted the STF ruling in ADC 49, with erga omnes and binding effects, by refusing the incidence of ICMS on the operations carried out by the Respondent prior to 2024 and without a pending process as of the publication of the judgment's minutes in ADC 49.

REPERCUSSIONS AND CHANGES

Unanimously, the Plenary confirmed the legitimacy of ICMS incidence on operations between establishments of the same taxpayer, whether domestic or interstate, occurring until December 31, 2023, allowing states to retroactively collect ICMS.

Thus, considering the general repercussion thesis established in Theme 1367, the non-incidence of ICMS on the movement of goods from one establishment to another of the same taxpayer located in different states only takes effect starting from the 2024 fiscal year. Consequently, the Justices reaffirmed the previously established understanding in the judgment of the Declaratory Appeals in ADC 49. Therefore, only taxpayers who initiated judicial actions or administrative defenses before April 29, 2021, the date of publication of the minutes of the substantive judgment, are safeguarded.

WHAT CONCLUSIONS CAN WE DRAW?

Although the decision has not yet become final, as there are still pending Declaratory Appeals, taxpayers should be attentive to the practical effects implied by this STF decision, which reaffirmed the modulation carried out in ADC 49. Among the key implications are:

• Attention to the need to collect ICMS on operations occurring until December 31, 2023;
• If the taxpayer has filed lawsuits after April 29, 2021, it may be necessary to reassess the contingency involved and, consequently, the possible impacts on operations; and
• It is important to observe the rules contained in Complementary Law No. 204/2023 and ICMS Agreement No. 109/2024.

Our Tax team is available to discuss the issues addressed in the ruling and the main aspects that may impact our clients' businesses.