Mario Graziani Prada, Paula Martins Ventura and Carolina Stephanie Borges de Amorim  In July 2015, the Attorney General′s Office of the State of Rio de Janeiro, bowing to the latest jurisprudence, issued the Official Letter PGE/PG/PG2 No. 826/2015, authorizing Treasury Officials to no longer offer resistance to lawsuits filed by taxpayers. Such lawsuits aim to avoid ICMS from being levied on temporary imports of goods, supported by international lease or charter contracts without the transfer of ownership.

Mario Graziani Prada, Paula Martins Ventura and Carolina Stephanie Borges de Amorim 

In July 2015, the Attorney General′s Office of the State of Rio de Janeiro, bowing to the latest jurisprudence, issued the Official Letter PGE/PG/PG2 No. 826/2015, authorizing Treasury Officials to no longer offer resistance to lawsuits filed by taxpayers. Such lawsuits aim to avoid ICMS from being levied on temporary imports of goods, supported by international lease or charter contracts without the transfer of ownership.

The posture of the State of Rio de Janeiro is based on the understanding adopted by the Federal Supreme Court in the ruling of Extraordinary Appeal No. 540829/SP, with general repercussions, in which the unconstitutionality of levying ICMS in a similar situation was recognized, precisely because there is no legal or economic movement of goods (ICMS taxable event) in charter transactions. In this ruling, the request for modulation of the effects of the decision, presented by the State of São Paulo, was dismissed.

In this context, given the formal recognition of the right of taxpayers by the State of Rio de Janeiro, we understand that taxpayers have strong arguments to seek, administratively or judicially, a refund of the ICMS amounts paid on temporary imports based on lease or charter contracts, without the transfer of ownership of the relevant goods.

In response to said opinion, since July 2015, the State of Rio de Janeiro has been applying the generic exemption without any challenge or dispute, however, stating that it awaits an amendment to the Constitution allowing for the collection of ICMS on temporary imports supported by lease contracts.

In this regard, it is worth highlighting the efforts of all governors for the Constitutional Amendment Proposal (PEC) 107/2015 to be approved, which aims to modify letter "a" of item IX of Paragraph 2 of Article 155 of the 1988 Federal Constitution, in order to allow ICMS to be levied on the entry of goods coming from abroad, even if the import relates to a leasing transaction with or without the possibility of immediate ownership transfer. For the draftsman of the proposal, Senator Lúcia Vânia (PSB-GO), the impossibility of collecting ICMS in such cases may subject the Tax Authorities to "abusive tax planning, given the careful examination of the contract may reveal a true purchase and sale transaction involving the goods".

On September 30, 2015, PEC 107/2015 was approved in a single plenary session of, and by unanimous voting by, the Senate, based on the opinion of Senator Lindbergh Farias (PT-RJ). Now, the PEC is under review by the House of Representatives.

This amendment is debatable. Therefore, we are waiting for further developments in this legislative process to better understand how the text will be finally drafted before expressing our opinion on the subject.