Rio de Janeiro State adjusts ICMS rates to Selectivity Principle


In brief

New supplementary bill that, acknowledging the essentiality of referred activities, states that State VAT (ICMS) rates must not outweigh 18%. 

More details

On July 1st, 2022, the Governor of the State of Rio de Janeiro issued Decree No. 48,145, acknowledging the internal transactions and services with (i) fuels; (ii) electric power; (iii) telecommunications; and (iv) public transportation as essential, and thus limiting the ICMS rate for such activities to 18%.

By issuing this Decree, the Executive Branch of the State of Rio de Janeiro is adjusting the State’s legislation to the provisions of Supplementary Law (Lei Complementar) No. 194/2022, which embraces Supreme Court’s understanding on the matter, as decided in RE 714.139/SC (Theme 745), specific to electric power and telecommunications.

The Decree has also preserved the current ICMS rates when lower than the limit established above, it should be highlighted, adapting the state legislation only where it does not conflict with the federal rule, as provided in article 24, § 4 of the Federal Constitution.

It is worth pointing out, finally, that the constitutionality of Supplementary Law (Lei Complementar) No. 194/2022 will still be challenged at the Supreme Court, through Direct Unconstitutionality Action (ADIn) No. 7195, filed by the States of Pernambuco, Maranhão, Paraíba, Piauí, Bahia, Mato Grosso Do Sul, Rio Grande Do Sul, Sergipe, Rio Grande Do Norte, Alagoas, Ceará and the Federal District.

Our tax team is at your disposal for further clarifications on this matter.

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