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Supreme Court determines that it is a crime not to pay ICMS declared when proven to bad faith

Supreme Court determines that it is a crime not to pay ICMS declared when proven to bad faith

Supreme Court determines that it is a crime not to pay ICMS declared when proven to bad faith 2560 1707

On Wednesday (18), the Supreme Court – STF – determined that it is a crime not to pay the Tax on The Circulation of Goods and Services (ICMS) already declared. ICMS is a state tribute applicable to all movement of products. It is paid by the final consumer at the time of purchase of the product or service.

By 7 votes to 3, ministers who made up the majority understand that this debt declared, but does not paid, characterizes misappropriation since ICMS is a tribute passed on to the consumer.

Most of the ministers also understand that for a crime to be characterized, it is necessary to prove the intention of not to pass on the amount to the government. Besides, the taxpayer must be a debtor with recurring default behavior. Therefore, a criminal act is characterized by the factual appropriation of the amount charged by the consumer.

Non-payment of the tax, in addition to making competition between companies unfair, harms the consumer and public coffers. According to minister Luís Roberto Barroso, this crime chains three “serious consequences”:

  • harms the consumer, who due to the increase in tax, has the product bought burdened;
  • harms market competition. After all, companies that do not pay the tax can sell cheaper or increase their profit margins;
  • finally, it harms the IRS, since the tax is not collected.

In 2018, according to information from CONSEFAZ – National Committee of Secretaries of Finance, Treasure, Revenue or Taxation of states and the Federal District – the declared debt of ICMS in 22 Brazilian states was more than BRL 12 billion.

With the tax debt is declared, it is not eligible for evasion. With this, courts in the country have made similar decisions to deal with the problem. Now, they begin to enter the court, requesting convictions for non-paying taxpayers.

The decision of the Supreme Court should not be mandatory for all federate units but will serve as a guide for the other instances to analyze the cases. Ministers Luiz Fux, Carmen  Lucia, Rosa Weber, Edson Fachin, Luís Barroso, Gilmar Mendes, and Dias Toffoli were considered the conduct as a crime.

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