The governor of the State of São Paulo, Tarcísio de Freitas (Republicans), kicked off the game of renewing ICMS (Tax on Circulation of Goods and Services) tax benefits that expire at the end of this year.
This Monday (16), the chief executive asked Alesp (Legislative Assembly of São Paulo) to extend 78 tax benefits, one of which is for companies that work with solar energy in the GD (distributed generation) segment.
In response to Canal Solar, the State Government informed that the proposal aims to renew tax benefits for another two years, until December 31, 2026.
Last week, the ABSOLAR (Brazilian Association of Photovoltaic Solar Energy) intensified the request to the São Paulo government for the maintenance of these tax incentives.
The benefit, instituted at the end of 2022, was fundamental to boosting distributed generation in the state of São Paulo, which at the time surpassed Minas Gerais in installed capacity and consolidated itself as the national leader in the segment.
As reported by Canal Solar, the association warned the São Paulo government that, without the renewal of the decree, the The state would run the risk of losing its leading position in solar generation, in addition to facing significant economic impacts, such as the closure of companies and the loss of jobs in the sector.
Currently, the State of São Paulo has approximately 5 GW of installed capacity and more than 516 thousand photovoltaic systems in operation in the micro and mini distributed generation segment.
ICMS
ICMS is a state tax levied on the circulation of products, goods and services, both within and between Brazilian states. It is regulated by the Federal Constitution and state laws, which means that each state can define specific rates and rules, within certain limits.
This tax applies to the sale of goods, provision of interstate and intercity transport services, telecommunications and even imports, and is charged indirectly, that is, the cost of the tax is included in the final price of products and services, and is paid by the consumer.
In the solar energy sector, ICMS may be levied on distributed generation (such as photovoltaic systems) in specific cases, for example, on the compensation of electrical energy generated and injected into the grid. In some states, as is currently the case in São Paulo, there are tax exemptions or benefits to encourage the use of solar energy.
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