Published in the Federal Official Gazette on June 23, 2022, Complementary Law No. 194/2022 considers fuels, natural gas, electricity, communications and public transportation essential and indispensable goods and services, and, consequently, limits the ICMS levied on such transactions to the minimum tax rate of each State, which varies between 17% and 18%.
Complementary Law No. 194/2022 also foresees the following:
i. The Federal Government shall deduct from the value of the installments of the debt agreements entered by the State or the Federal District and the National Treasury Secretariat the collection losses that occurred in fiscal year 2022 resulting from the reduction of ICMS collection that exceeds 5% of the ICMS tax collected in fiscal year 2021. If there is a refinancing agreement, the collection losses will be fully compensated by the Federal Government.
ii. Complementary Law No. 192/2022 would be amended to determine the ICMS calculation basis for purposes of the tax substitution regime in diesel transactions as the moving average of projected average prices to the final consumer in the 60 months prior to December 31, 2022.
iii. The PIS, COFINS, and CIDE rates levied on transactions with ethanol, including for fuel purposes, would be reduced to 0 until December 31, 2022. The legal entity that purchases the products to be used as inputs will be entitled to the presumed credit for these contributions.
iv. The PIS-Import and COFINS-Import rates levied on alcohol imports, including for fuel purposes, would be reduced to 0 until December 31, 2022.
The passage of Complementary Law No. 194/2022 was followed by a presidential veto, which will be analyzed in a joint session of the National Congress within 30 days.