Ordinance CAT No. 24/2018, enacted on March 23, governed, among other issues, transactions with digital goods and merchandise traded through electronic data transfer.

The objective was to regulate the changes implemented by Convention 106, of September 29, 2017, internalized in the State of São Paulo through the changes introduced in the ICMS Regulation by Decree No. 63.099/2017.

Considering the importance of the matter, we list below the most relevant points of Ordinance CAT No. 24/2018:

(i)    Concept of digital goods and merchandise  - in accordance with article 1 of the ordinance, digital goods and merchandise are "all those not personified, inserted in a mass marketing chain, as were the cases of those put on sale in a physical means: (a) Software, programs, electronic games, electronic files, and similar applications that are standardized (off the shelf), whether or not they have been or can be adapted, whether used by the purchaser through download or in the cloud; and (b) audio, video, images, and text content, with definitive assignment (download), subject to the immunities of books, newspapers, and periodicals."

(ii)    Issuance of NFs: pursuant to article 2 of the ordinance, "establishments that market or make available digital goods or merchandise are required to issue NFes". Although the obligation set forth in the head paragraph of article 2, paragraph 1, of that article is capable of allowing establishments "to issue by the 5th business day of each month NFes consolidating all exits of digital goods and merchandise destined for people domiciled or established in the same municipality carried out in the previous month.” Regarding the obligation to issue NFes, article 4 of the Ordinance states that “the issuance of a tax document is not required in transactions carried out by means of electronic data transfer with goods and merchandise prior to transfer to the final consumer."

(iii)    State registration obligation: pursuant to article 5, the ordinance provided that "the websites and electronic platforms referred to in item IV of article 16 of RICMS/2000 must have a registration in the ICMS Taxpayer Registry of the State of São Paulo specific to carrying out transaction with digital goods and merchandise destined to a person domiciled or established in this State.” Also on this topic, this article provides further that "considering that it is a virtual establishment, the address should be filled with the following information: Praça da Sé, no number, CEP 01001-000, São Paulo, SP, and the address for correspondence must be filled in with the taxpayer's information.” One should note that, under the terms of paragraph 5 of article 5 of the Ordinance, this obligation "also applies to websites and electronic platforms that sell directly to final consumers goods and merchandise that are exempt or not taxed."

Notwithstanding the date of its enactment, CAT Ordinance No. 24/2018 will enter into effect on April 1, 2018. We note that the above analysis contains a summary of the main points of CAT Ordinance No. 24/2018. It is important to carry out a careful analysis of each individual case and all its particularities.