ICMS exemption for photovoltaic equipment is approved in SP

A Alesp (Legislative Assembly of the State of São Paulo) approved, in a session held this Tuesday (26), with the decision of Confaz (National Council for Financial Policy) to exempt ICMS (Tax on Circulation of Goods and Services) for photovoltaic equipment.

O Legislative decree no. 2,518, of 04/26/2022, published in Official State Gazette this Wednesday (27), includes solar water panels and heaters to the list of components aimed at generating renewable energy that are exempt from tax.

The document expresses agreement with the 24/22 Agreement, which changed the NCM (Common Mercosur Nomenclature) tax codes in the Agreement 101/97 maintaining the ICMS exemption.

“Solar is an effective and cheap alternative within our country. We have to encourage more and more families, companies and institutions to use Photovoltaics“, highlighted the deputy Carlão Pignatari, president of Alesp.

Impact on the solar sector

For Hewerton Martins, president of the Solar Entrepreneur Association, the decree is fundamental as it brings fiscal security to those who work with solar energy.

“This avoids the risk of undue and indiscriminate tax charges, thus making products more expensive. Furthermore, it gives peace of mind to distributors, manufacturers and integrators, in the sense that they can transport the goods without the risk of stopping at a tax customs point”, he emphasized.

State deputy Castello Branco (PL), one of the main organizers for the state to exempt ICMS for photovoltaic equipment, highlighted that Alesp's approval was a historic achievement.

“It is a regulatory framework, as it sets a precedent of no longer charging one of the most expensive taxes in the country on the energy that is the sun. Without a doubt it is a great advance. It increases job creation and family income and even benefits agribusiness – a segment in which solar is already a reality”, he concluded.