Diogo Martins TeixeiraLuíza Oliveira Azevedo and Matteus Mendonça

Complementary Law 192/22 regulated the iCMS single-phase incidence regime on fuels, provided for in Article 155 paragraph 2nd, XII, ‘h’ of the Federal Constitution, among other measures. The single-phase regime shall be applicable to the following fuels:

  • Gasoline and ethanol anhydrous fuel;
  • diesel and biodiesel; and
  • liquefied petroleum gas, including natural gas derivatives.

Under the single-phase regime, the ICMS on these fuels will be charged only once on the supply chain. It shall be collected by producers (including those who produce fuels in a residual manner, fuel formulators by mechanical mixing, petrochemical plants, oil refineries and other establishments treated as producers), at the time of the exit of the products from their establishment, or by importers at the customs clearance of the product.

The complementary law also states that the rates under such regime will be Ad Rem, that is, they will be specific nominal values per unit of measure of the product and should be fixed through deliberation of the states and the Federal District within the definitions of the National Council of Treasury Policy (Confaz).

The rates should be uniform in the national territory, however it can be differentiated by product.  The first amendment will have to comply with a minimum period of 12 months after its fixation and at least six months for subsequent adjustments.

The definition of the initial rates and their adjustments should observe estimates of fuel price developments. The goal is to avoid the proportional increase of its load in the formation of the final price to the consumer.

Specifically for diesel, a transitional rule has been established until 31 December 2022 or until the single-phase fuel rate is set. During that period, the tax calculation basis for tax substitution purposes would correspond to the moving average of the average prices to the final consumer in the 60 months preceding its fixing. The single-phase tax rate for diesel was established  by the ICMS  Agreement 16 of March 24, 2022.

The allocation of the tax levied under Complementary Law 192/22 will depend on the type of fuel (derived from oil or not) and on its recipient (taxpayer of ICMS or not), and shall be due:

  • to the state where the consumption occurs, in transactions with petroleum-derived fuels;
  • to the states of origin and destination, in interstate transactions between taxpayers, with non-petroleum fuels, dividing in the same proportionality used for transactions with other goods; and
  • to the state of origin, in interstate operations for non-taxpayers of ICMS with non-petroleum fuels.

The complementary law also establishes compensation mechanisms between the states and the Federal District, such as clearing house or other instruments, with attributions related to the funds collected as a result of the single-phase incidence of the ICMS. It also establishes the possibility of assigning responsibility for withholding and collecting ICMS to tax taxpayers or to depositories of any security.

The granting of tax incentives on transactions with fuels subject to the single-phase regime will also depend on the edition of the ICMS Agreement by the states under Confaz.

The law reduced to zero, until December 31, 2022, the PIS and COFINS rates on the gross revenue of producers and importers arising from the sale of diesel oil and its subsidiary products, biodiesel and liquefied petroleum gas, derived from oil and natural gas, and aviation kerosene.

The same treatment was granted to the PIS-import and COFINS-import rates levied on import transactions with the same products mentioned above.

Complementary Law 192/22 also suspended the effects of the financial and budgetary adequacy rules provided for in Complementary Law 101/00 and Law 14,194/21, in relation to ICMS, CIDE-Fuels, PIS, COFINS and other contributions to social security.

Access the article of  the ICMS Agreement 16/22, which disciplined the single-phase incidence of ICMS for diesel oil.