As provided for in the Federal Constitution, it is up to the States and the Federal District to establish, by means of ordinary law, the moment in which the transfer of goods takes place.
Although operations involving electrical energy have been classified as commercial operations, this is a good whose ownership is only effectively transferred upon consumption, since its stock is still somewhat uncommon – despite the fact that battery technology is on the verge of causing immense disruption in this regard.
In other words, the taxable event for ICMS (Tax on the Circulation of Goods and Services) on electricity does not occur with the output or sale of electricity by a producing source, nor with its distribution, but rather with its actual consumption, with the consumer of electricity being the actual taxpayer. Therefore, ICMS must be levied on the value of the energy actually consumed.
It turns out that the law, in order to facilitate and centralize collections for the treasury related to the captive energy market, assigned responsibility for collecting ICMS to a third party, in this case, the distributors.
However, the ICMS taxable event does not occur only with the physical transfer of the goods, but also with the legal transfer, thus configuring an act of merchandise.
In fact, when judging ADC 49 (Declaratory Action of Constitutionality 49), the STF (Supreme Federal Court) understood that moving goods between establishments that have the same owner is a mere physical movement that does not trigger the ICMS requirement, as only the circulation of goods with the consequent transfer of ownership (i.e. sale from a merchant to the end consumer) will be configured as a taxable event for this tax.
Regarding the calculation basis for ICMS on electricity, it must include the total value of the transaction, including energy and distribution/transmission tariffs.
This is because, after a long discussion at the STJ (Superior Court of Justice), it was decided that the TUSD (Distribution System Usage Tariff) and the TUST (Transmission System Usage Tariff), when included in the energy bill as a charge for the end consumer, must form the basis for calculating the ICMS.
Regarding the ICMS rates on electricity, after the decision Extraordinary Appeal 714.139/SC, in the context of General Repercussion (Theme No. 745), which established the understanding that the ICMS rates on electricity transactions and telecommunications services could not be higher than those of transactions in general due to the precept of selectivity, these were reduced by the states in general, after having been momentarily increased during the calendar year of 2023.
Having made these preliminary considerations about the matrix rule for the incidence of ICMS tax on electricity, we move on to the analysis of DG (distributed generation).
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