The Tax Adjustment Package of the State of São Paulo starts from the premise that the taxation of ICMS at a rate lower than 18% is considered a tax benefit (article 22, § 1, of Law nº 17.293 / 2020).
In this context, after the project’s authorization, the State Government institutes the need for complement when internal rates lower than 18% apply, through Decree nº 65.253 / 2020, which amended articles 53-A and 54 of the RICMS / SP.
• Complement x differential
Preliminarily, it is essential to be clear that the complement of rates is not to be confused with the differential rates, paid in the acquisition of goods from other Units of the Federation.
Some states use this terminology, which can lead to such confusion.
Thus, it is necessary to remember that, in the State of São Paulo, the rate complement is something completely different from the rate differential.
• Definition
One of the most important points of the Tax Adjustment Package establishes that any taxation with an internal rate lower than 18% will be considered a tax benefit (article 22, § 1, of Law nº 17.293 / 2020). Another essential point is that the Executive Branch was authorized to reduce the tax benefits (article 22, item II, of Law No. 17,293 / 2020).
In practice, these supplements will represent exactly a decrease in the incentive, and, as a consequence, an increase in the tax burden.
• Application assumptions
The complement will be due in the internal operations with goods for which, currently, the rates of 7% and 12% are expected to be applied. The goods are listed in articles 53-A and 54 of the RICMS / SP.
In operations subject to the internal rate of 7%, the supplement will be 2.4%, with a final tax burden of 9.4%.
In operations subject to the internal rate of 12%, the complement percentage will be 1.3%, and the final tax burden, 13.3%.
| Internal rate | Complement | Effective tax burden |
| 12% | 1,3% | 13,3% |
| 7% | 2,4% | 9,4% |
This change applies to all goods listed in articles 53-A and 54 of the RICMS / SP.
Specifically in relation to transport services performed within the territory of São Paulo, which are taxed at the rate of 12% (article 54, item I of RICMS / SP), they are not subject to the payment of the supplement.
In the case of motor vehicles subject to the tax substitution regime, as of April 1, 2021, the rate supplement will be 2.5%, with such operations subject to a 14.5% tax burden. The alteration was given by Decree nº 65.453 / 2020.
• Validity
The changes in the rates will only take effect as of January 15, 2021. Therefore, until 01/14/2021, the taxation rule that is applied today is maintained, with the rates of 7% and 12%
The payment of add-ons will be required for 24 months – starting on January 15, 2021, and ending on January 14, 2023.