New NCMs come into effect from this Friday (1st)

The new NCMs (Common Mercosur Nomenclature) come into effect from this Friday (1st) across the country, bringing repercussions on the commercialization of photovoltaic equipment, such as solar modules and generators. 

However, as already reported by Canal Solar, ICMS Agreement 117/96 (ICMS Agreement No. 117, of December 13, 1996) must ensure that photovoltaic generator kits continue to receive the same treatment tax.

The agreement determines that in the event of reclassifications, groupings and splitting of NCM codes, the tax treatment of the ICM/ICMS Agreements and Protocols remains valid in relation to goods and assets classified in said codes. 

Which means that, despite the reclassifications of NCMs having occurred, companies operating in the photovoltaic market can continue to obtain exemption from ICMS through ICMS Agreements No. 101/97 e 114/17.

CONFAZ requests postponement

Recently, CONFAZ (National Council for Financial Policy) sent a letter to the Ministry of Economy requesting that the effective date of GECEX Resolution No. 272/2021 be changed to August 1, 2022. 

However, until this Thursday (31), the Ministry of Economy did not issue any position, which means that the effective date of the new NCMs remains on April 1st.

Minas Gerais 

This Thursday (31), the Taxation Superintendence of the State of Minas Gerais published the Announcement No. 002/2022, containing a text similar to that of ICMS Agreement No. 117/96. 

The statement states that: “as of April 1, 2022, the reclassifications, groupings and splits of NCM codes do not imply changes in the tax treatment provided for in state tax legislation, subject to the adequate correlation between the new codes and those previously applicable ”

Furthermore, the statement provides guidance on the conduct of taxpayers when filling out tax documents from this date onwards, through the following note: 

“the taxpayer must inform the current NCM code in the tax documents, observing the same tax treatment attributed to the good and merchandise before reclassification, grouping or splitting”. 

The text further reinforces that: “in relation to tax substitution, such changes do not imply the inclusion or exclusion of goods from the regime nor any change to the Tax Substitution Specification Code (CEST).

writ of mandamus 

In view of this scenario, a ABSOLAR (Brazilian Association of Photovoltaic Solar Energy) decided to file a legal injunction in several states. 

“We are working to obtain the first injunctions over the next few days. This will bring another layer of tax security to protect our members in relation to the ICMS charge on photovoltaic equipment and systems,” said Rodrigo Sauaia, CEO of the entity, in a video released by ABSOLAR on the social networks. 

In this same video, the executive also announced that the Association also prepared a technical note with commercial practices that can be adopted by its members to minimize possible losses caused by the new nomenclatures.