On April 20, 2020, State Law No. 8,795/2020 was published, amending provisions of Law No. 2,657/1996, to regulate transactions of digital goods and the provision of communication services performed by a legal entity owning a website or electronic platform in the state of Rio de Janeiro.
We highlight certain changes below.
- ICMS taxpayers
According to the new law, the ICMS taxpayers are:
a) The legal entity that owns a website or electronic platform that advertises or carries out digital sales (even through periodic payments) through electronic data transfer;
b) The legal entity that owns a website or electronic platform that provides communication services, even through periodic payments.
c) The importer of digital goods.
- Tax responsibility
In transactions involving digital goods (e.g., streaming videos, downloadable software), the following agents are responsible for paying ICMS:
i. The legal entity that owns the website or electronic platform that makes the sale—or delivers it through electronic data transfer per a contract signed with the communication service provider—if it also responsible for the financial transaction;
ii. The financial intermediary, including the administrator of a credit card or other payment method, if the legal entity that owns a website or electronic platform only makes the offer or delivery by means of electronic data transfer;
iii. The purchaser of the digital goods in the event that the taxpayer or responsible person described in items (i) and (ii) above are not registered in the State of Rio de Janeiro (state enrollment);
iv. In import transactions, the credit or debit card administrator or the financial intermediary responsible for the exchange.
In respect to the transactions with non-digital goods (i.e., physical items, such as clothes), the party responsible for the ICMS payment will be the owner or possessor of the website or electronic platform attracts customers and that carries out the sale, per a contract signed with the wholesaler, when it carries out the financial transaction and tracks the order, even before an invoice is issued.
In addition, payment intermediaries, including the creditor and/or administrator of a credit/ debit card or other payment method, will be responsible for the payment of the tax due in the transactions intermediated by them:
i. When they fail to provide the sales information in the manner and within the period prescribed by law;
ii. When the taxpayer is in an irregular registration situation and the intermediary has been previously informed of this situation by the Tax Authorities;
iii. When they do not comply with other obligations provided for in the legislation and that triggers the non-payment of the tax.
It should be noted that the difference between the values informed by the digital service providers referred to in items VIII and IX of art. 18 of Law nº 2,657/1996 (financial intermediary, credit card administrator, among others) and those registered in the taxpayer's tax or accounting records or in the documents issued by the latter will be considered as goods outflow or provision of services without issuing a proper fiscal invoice.
- Applicable penalties
Financial intermediaries and credit and debit card administrators are subject to a fine of up to 100,000 UFIR-RJ in cases where they fail to file or file incomplete/inconsistent information on transactions carried out by taxpayers' establishments whose payments are made through their systems.
Law No. 8,795/2020 entered into force on the date of its publication and becomes enforceable 30 days after the entry into force of regulations that will be enacted by the executive branch—which will be more than 90 days from April 20, 2020, the law’s date of publication.
For more information on this topic, please contact our Tax Team.