The Complementary Law Project (PLP) No. 79/2023, presented in the Federal Senate on March 30, 2023, allows the extension of the term of the tax and financial-tax incentives of ICMS (Tax on the Circulation of Goods and Services) reinstituted under the terms of Complementary Law No. 160/2017 for another ten years.
With the extension, the States that reinstituted the tax incentives will be able to grant and extend the referred incentives until December 31, 2042 (according to the current legislation, the final term is December 31, 2032).
In addition to the extension of the term, PLP No. 79/2023 also revokes the gradual reduction of 20% for certain tax incentives as of 2029. This rule is applicable to the tax incentives related to commercial activities, interstate transactions with agricultural and vegetable extraction products in natura and to the maintenance and increase of port and airport activities related to international trade.
PLP 79/2023 also aims to strengthen compliance with the legal certainty principle and the acquired right for taxpayers who already use the tax incentives. In this regard, the text establishes that, although the granting State may revoke or modify the granting act or reduce its scope or the amount of the tax incentive, it must be ensured the enjoyment of the incentives according to the terms and conditions by which they were granted.
Therefore, the revocation or amendment to reduce the effects of tax incentives will only produce effects for new beneficiaries, protecting those who already enjoyed the aforementioned regimes.
PLP No. 79/2023 has as its main justification the fact that tax incentives are relevant tools for promoting development policies and reducing regional inequalities, generating socioeconomic results in attracting entities to certain specific regions.
The justification also mentions the existence of tax reform proposals (PECs No. 45/2019 and 110/2019) and the possibility of future extinction of the ICMS. However, it is highlighted that the competence of the States and the Federal District, as currently in force, will remain for a certain period of time. The extension of ICMS incentives is necessary to safeguard them, with stability and predictability, during any transition period.
