{"id":31944,"date":"2026-05-08T14:00:00","date_gmt":"2026-05-08T17:00:00","guid":{"rendered":"https:\/\/lefosse.com\/?p=31944"},"modified":"2026-05-08T14:12:51","modified_gmt":"2026-05-08T17:12:51","slug":"taxation-on-consumption-in-april-what-the-higher-courts-have-been-discussing","status":"publish","type":"post","link":"https:\/\/lefosse.com\/en\/newsletter\/taxation-on-consumption-in-april-what-the-higher-courts-have-been-discussing\/","title":{"rendered":"Taxation on consumption in April: what the higher courts have been discussing"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\"><strong>Brazilian Supreme Court resumes ICMS judgment<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Brazilian Supreme Court resumes judgment on ICMS levied on federal subsidy for the social electricity tariff<\/strong><\/h3>\n\n\n\n<p>The Brazilian Supreme Court (STF), in the Virtual Plenary, resumed the judgment on whether the economic subsidy established by Law No. 10,604\/2002 should be included in the ICMS calculation base levied on electricity.<\/p>\n\n\n\n<p>The controversy involves amounts transferred by the Federal Government to electricity concessionaires to enable the social tariff intended for low-income residential consumers.<\/p>\n\n\n\n<p>The reporting Justice, Justice Cristiano Zanin, voted against the levy of ICMS on the subsidy, on the grounds that the amounts transferred by the Federal Government do not constitute the price of the electricity supply transaction, but rather a mechanism for economic and financial recomposition and preservation of tariff affordability. Justice C\u00e1rmen L\u00facia and Justices Andr\u00e9 Mendon\u00e7a, Alexandre de Moraes, and Dias Toffoli followed the reporting Justice.<\/p>\n\n\n\n<p>The thesis proposed by the reporting Justice excludes the levy of the tax on the subsidy intended for consumers in the Low-Income Residential Subclass.<\/p>\n\n\n\n<p>Dissent was opened by Justice Fl\u00e1vio Dino, according to whom the existence of a federal subsidy would not prevent the levy of ICMS at the state level. Subsequently, Justice Nunes Marques requested review, suspending the discussion.<\/p>\n\n\n\n<p>The judgment is relevant because it will define, under the general repercussion system, whether the States may charge ICMS on the portion of the tariff that is not effectively borne by low-income consumers, but is transferred by the Federal Government to distributors as a public policy instrument.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Brazilian Supreme Court reviews ICMS exemption<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Brazilian Supreme Court reviews Confaz agreement on ICMS exemption for social tariff<\/strong><\/h3>\n\n\n\n<p>The STF resumed the judgment of a Direct Action of Unconstitutionality (ADI) challenging an ICMS Agreement that authorizes the States of Bahia and Rond\u00f4nia to grant ICMS exemption on the subsidized portion of the electricity tariff in the supply to consumers classified in the Low-Income Residential Subclass.<\/p>\n\n\n\n<p>Although the agreement is formally exemptive in nature, the central discussion is whether it could, by reverse interpretation, legitimize the collection of ICMS on the subsidized portion in other cases.<\/p>\n\n\n\n<p>The reporting Justice, Justice Luiz Fux, voted to partially grant the action, to reject any interpretation allowing taxation of the subsidy. The vote was followed by Justices Alexandre de Moraes, Andr\u00e9 Mendon\u00e7a, and Dias Toffoli.<\/p>\n\n\n\n<p>In a vote after review, Justice Cristiano Zanin followed the reporting Justice, with different reasoning, arguing that the federal subsidy does not represent consideration for the supply of electricity.<\/p>\n\n\n\n<p>So far, the only dissenting vote was presented by Justice Fl\u00e1vio Dino. According to him, establishment of the subsidy at the federal level does not alter the States\u2019 jurisdiction to collect ICMS.<\/p>\n\n\n\n<p>The outcome of the ADI may define the limits of Confaz agreements on tax benefits and, above all, clarify whether the subsidy linked to the social tariff may be treated as a taxable amount for purposes of the state tax.<\/p>\n\n\n\n<p>The case is currently suspended due to a request for review by Justice Nunes Marques.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><em>This material is for informational purposes only. Our Consumption&nbsp;<a href=\"https:\/\/lefosse.com\/en\/practice\/tributario\/\" target=\"_blank\" rel=\"noreferrer noopener\">Tax<\/a>&nbsp;team is available to provide specific legal advice.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Brazilian Supreme Court resumes ICMS judgment Brazilian Supreme Court resumes judgment on ICMS levied on federal subsidy for the social electricity tariff The Brazilian Supreme Court (STF), in the Virtual Plenary, resumed the judgment on whether the economic subsidy established by Law No. 10,604\/2002 should be included in the ICMS calculation base levied on electricity. [&hellip;]<\/p>\n","protected":false},"author":47,"featured_media":29412,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[835],"tags":[802,577,274,776],"class_list":["post-31944","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-newsletter","tag-joao-paulo-muntada-cavinatto","tag-rafaela-canito","tag-tax","tag-vinicius-juca"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Taxation on consumption in April: what the higher courts<\/title>\n<meta name=\"description\" content=\"The Brazilian Supreme Court (STF), in the Virtual Plenary, resumed the judgment on whether the economic subsidy established by Law\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link 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