Rio can not charge ICMS for oil, decides STF

Last Friday (26) the trial on the collection of ICMS by the state of Rio de Janeiro on oil extraction ended, and the Supreme Court (STF) ruled for the unconstitutionality of two state laws that determined the payment of taxes by oil companies.

The Brazilian Association of Oil and Gas Exploration and Production Companies (Abep) was responsible for the action against laws 7,183/2015 and 4,117/2003, for the understanding that oil extraction could not be considered a goods circulation operation. Rio de Janeiro's defense, in turn, argued that the collection would be legitimate because of the commercial destination of oil extraction. The rapporteur of the case, Dias Toffoli, understood that there was no business of a mercantile nature.

The ministers of the Supreme Luís Roberto Barroso, Carmen Lúcia, Alexandre de Moraes, Nunes Marques, Luiz Fux, Ricardo Lewandowski, Rosa Weber and Gilmar Mendes agreed with him; Marcus Aurelius and Edson Fachin disagreed with modulation.

Thus, these two laws of Rio de Janeiro are no longer valid from the publication of the minutes of the merits of the judgment. However, what was collected during the validity of the law will not have to be returned by the government of Rio de Janeiro. Despite this, the decision means a drop in state revenue.

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