By Pedro Franco Coelho and Tatiana Giovanelli de Almeida Souza

The incidence of the Tax on the Circulation of Goods and Services (ICMS) on services of streaming has been in the news since December of last year, with the publication of ICMS Agreement 106, by CONFAZ, which authorizes States to issue their internal rules for charging the aforementioned tax on these services.

As we previously reported (https://www.mazzuccoemello.com/?p=5455), the promulgation of a decree by the State of São Paulo, a pioneer in the regulation of ICMS on services, has gained prominence in recent months. streaming. However, the decree was declared ineffective by the Court of Justice of São Paulo (TJSP), due to a formal defect in the institution of the tax, which should have been carried out via ordinary law.

Despite the recent victory of service providers streaming in court, other states will be able to correct the formal error pointed out by TJSP and present their bills to regulate the collection in their territories under the support of ICMS Agreement 106.

This Agreement is the target of several criticisms for violating a series of constitutional and legal provisions, including in the Chamber of Deputies, where Legislative Decree Project No. 975/2018 is being processed to suspend it, and in the Federal Supreme Court (STF), where Direct Action of Unconstitutionality (ADI) 5958 filed by BRASSCOM (Brazilian Association of Information and Communication Technology Companies) in June 2018 is being processed.

However, while the standard remains valid, it is important that service providers streaming pay attention to the States' respect for the principles of legality and prior notice, according to which the tax may only be created or increased by means of law and take effect from the 1st day of the following year and, at least, 90 days after publication.

The Mazzucco & Mello Advogados team is available to advise its clients on the legality of these rules and on the legal measures to challenge them when applicable.