STF sets aside ICMS surcharge on telecommunications in Alagoas as from 2027
The Brazilian Supreme Court (STF) unanimously held that the 1% ICMS surcharge levied on telecommunications services and allocated to the Fund for Combating and Eradicating Poverty (Fecoep) of Alagoas ceased to produce effects following the enactment of Complementary Law No. 194/2022 (LC 194). The Court modulated the effects of the decision so that the surcharge ceases to be collected as from January 1, 2027, with the exception of judicial and administrative proceedings pending on the date of publication of the minutes of the judgment.
According to the STF, by recognizing telecommunications services as essential and indispensable, LC 194 prevented them from being considered superfluous for purposes of collecting the surcharge allocated to Fecoep. Although the state rule was valid when enacted, the Court held that it partially lost its effectiveness upon the subsequent enactment of the federal complementary law.
STF invalidates ICMS benefit for beers with added cashew juice
The STF declared unconstitutional a rule of the State of Piauí that reduced the ICMS applicable to beers containing a minimum percentage of cashew juice. In the Court’s view, the addition of a small amount of the ingredient does not change the nature of the beverage or turn it into an essential product, and there was therefore no justification for granting favorable tax treatment.
The Court further held that the benefit violated the principles of tax equality, ICMS selectivity, and free competition, in addition to having been established without the estimate of budgetary and financial impact required by the Transitional Constitutional Provisions Act.
The effects of the decision were modulated to apply only as from publication of the minutes of the judgment, with Justice Edson Fachin dissenting solely as to the modulation.
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