Aiming to stimulate an extremely relevant sector for the State of Rio de Janeiro, the  Governor in charge passed Law No. 9.214/2021, granting a special tax treatment to companies and consortium, established or to be established in the State, that implement or have implemented projects for power generation plants.

The State Parliament (ALERJ) started to discuss the granting of new tax benefits to the electric power sector by law shortly after Legislative Decree nº 04/2020, which sustained the effects of State Decree nº  46.944/2020, an earlier attempt by State Government to grant special tax treatment to the sector.

The tax benefits entail:

(a) the deferral of ICMS on import operations or internal acquisition of machines, equipment, pieces, parts and accessories intended for the installation of the project, which will be the responsibility of the acquirer and collected at the time of sale or eventual exit, taking as the basis of calculation the sales’ value, as well as in the interstate acquisition, concerning the ICMS-DIFAL; and

(b) the exemption of ICMS on import operations of natural gas, even if liquefied, by thermoelectric companies that won auctions, to be consumed in the process of generating electricity, as long as it is imported or cleared through Rio de Janeiro’s ports.

This special tax regime represents an important step for the industry in the face of the new gas regulatory mark and the growth in the production of pre-salt natural gas, besides being a necessary stimulus for the recovery of Rio de Janeiro´s economy.

The tax and energy teams of Fraga Bekierman & Cristiano Advogados are available to answer possible doubts about the new legislation.