STJ upholds the possibility of offsetting ICMS-ST credits after a corporate merger
The 2nd Panel of the Superior Court of Justice (STJ) unanimously upheld a decision favorable to the taxpayer in a dispute concerning the use of accumulated ICMS-ST credits following a corporate merger. The credits had originally been recorded by a company later merged into another company of the same economic group.
The State of São Paulo argued that, as a result of the merger, the credits would have been converted into ordinary ICMS credits, which would prevent their use to settle ICMS-ST liabilities, due to the impossibility of offsetting between different regimes under São Paulo legislation. The State also alleged a risk of duplicate use.
The taxpayer argued that the São Paulo Court of Justice had recognized that the credits in question were ICMS-ST credits used to settle ICMS-ST liabilities, thereby rejecting the recharacterization sought by the tax authorities. The expert evidence produced in the case concluded that there had been no duplicate use of the credits, and the STJ upheld this understanding, barring tax reclassification of the credits as a result of the corporate reorganization.
CARF upholds penalty for concealment of the real purchaser in imports of information technology equipment
The 1st Ordinary Panel of the 4th Chamber of the 3rd Section of the Administrative Council of Tax Appeals (CARF) upheld a tax assessment for concealment of the real purchaser in import transactions involving information technology equipment. The assessment imposed a penalty corresponding to 100% of the customs value, on the grounds that the imports had been registered in the name of an interposed party, although the goods had the assessed entity as their predetermined recipient.
The panel held that the evidentiary record demonstrated a commissioned import transaction with concealment of the real purchaser, rather than a direct import followed by resale. Among the elements taken into account were the absence of inventory, showroom, and autonomous commercial structure on the part of the importer, the global agreement executed abroad between the parties, manufacture of the servers according to specifications previously defined by the assessed entity, the short interval between customs clearance and issuance of the outbound invoices, and the direct delivery of the goods from customs to the facilities of the assessed entity.
CARF rejected the preliminary nullity arguments and, by casting vote, dismissed the allegation of interlocutory statute of limitations, denying the voluntary appeals. For the panel, the fine replacing forfeiture, provided for in article 23, paragraph 3, of Decree-Law No. 1,455/1976, does not fall within the category of merely administrative customs infractions addressed in STJ Repetitive Theme No. 1,293, since concealment of the taxable person directly affects identification of the taxpayer and oversight of tax obligations.
CARF Superior Chamber recognizes retroactive application of the concept of market area for purposes of the Minimum Taxable Value of the IPI
The 3rd Panel of the CARF Superior Chamber denied the Special Appeal filed by the National Treasury in a case involving the determination of the Minimum Taxable Value of the IPI in transactions between interdependent companies. The dispute concerned the concept of market area for purposes of applying the Minimum Taxable Value and the possibility of retroactive application of the Law that came to define the market area as the municipality of the sending establishment.
For purposes of calculating the Minimum Taxable Value, the tax authorities had adopted the weighted average of prices practiced in the wholesale market of the southern region of Minas Gerais. The appealed decision rejected this methodology on the grounds that the relevant Law has an interpretative nature and may therefore apply retroactively under article 106, I, of the National Tax Code, thereby limiting the concept of market area to the municipality of the sending establishment also for taxable events occurring before its enactment.
In upholding the appealed decision, the Superior Chamber concluded that the provision is interpretative in nature and must be applied retroactively. The Reporting Judge noted that, absent the legislative amendment, the concept of market area would admit a broader interpretation, such as the wholesale market in which the taxpayer operates. Even so, she held that CARF could not disregard application of the law without a declaration of unconstitutionality by the Brazilian Supreme Court. The decision is relevant for tax assessments on the matter based on a broadened concept of market area, especially in transactions between industrial establishments and interdependent distributors.
This publication is intended for informational purposes only and does not constitute legal advice. Our Indirect Tax team remains available to provide specific legal guidance tailored to your business needs.
