On September 16, 2021, State Decree 47,762/2021 was published, which regulates the provisions of Law 9,041/20. That law is responsible for internalizing ICMS Convention 51/2020, which authorizes the Brazilian states to grant a reduction of the ICMS (state value added tax) on internal transactions with marine diesel oil, by applying the percentage of 4.5% on the value of the transaction.
From the publication of the Decree, whose effects are retroactive to July 1, 2021 and will last until December 31, 2040, internal transactions with marine diesel oil to be consumed by vessels engaged in research, exploration and/or production of oil and natural gas and the logistical movement of oil, its derivatives, and liquid natural gas derivatives will now enjoy a reduction from 18% to 4.5% on the value of the transaction.
In addition, the Decree determines the meaning of vessel, which corresponds to any maritime structure capable of moving, under its own power or not, or of floating on water, including its attached and support structures, such as platforms and maritime rigs, fixed or floating, ships and boats. It also clarifies that internal transactions are those carried out within the state of Rio de Janeiro, including transactions between establishments of the same taxpayer.
Thus, companies that engage in such internal transactions in accordance with the Decree may benefit from the reduction of the ICMS percentage, while reversing the credits related to the entry proportionally. The consumption of marine diesel oil in a manner different from that specified, however, excludes the application of the reduction in the calculation base, subjecting such companies to assessment of ICMS at the full rate, and payment of the difference in the tax owed by the purchaser.
Any establishment that produces and/or sells marine diesel oil that consumes the product in the logistical movement of oil and derivatives, pursuant to Article 3, must issue an exit invoice with itemization of the ICMS, applying the reduction of the calculation basis.
Finally, the State Revenue Secretariat (SEFAZ) will be responsible for issuing the follow-on acts necessary to regulate the Decree.
The Tax Department of Castro Barros is available to provide any clarifications about the new rules.