Between the 22nd and 29th of September, the Federal Supreme Court (“STF”) will virtually judge Extraordinary Appeals Nos. 662976 (Theme 619 of the General Repercussion) and 704815 (Theme 633) in which it will decide whether fixed and inputs used in the production process of goods intended for export could grant tax credits of the Tax on the Circulation of Goods and Services (“ICMS”). As it is a General Repercussion, the decision will be applied to all taxpayers.

Taxpayers defend the right to credit because fixed assets and inputs are essential for the production of the final exported product. On the other hand, the States argue that only the inputs that are part of the exported product would grant the right to ICMS tax credit. There is an expectation that the STF will decide favorably, since there is also an official legal opinion from the Attorney General's Office favorable to taxpayers.

In this scenario, we recommend that ICMS taxpayers that carry out export transaction to file a lawsuit to discuss the right to ICMS tax credits on the acquisition of fixed assets and inputs by 09/21/2023, given the risk of possible modulation of the decision, which will make it impossible to use eventual ICMS tax credits generated in the last 5 years.

By Henrique Erbolato