Dados necessários para melhorar nosso serviço e personalizar a sua experiência.
Undue collection of ICMS on stolen electricity
BY ALEXANDRE JUNQUEIRA
As is generally known, Distributors acquire electrical energy intended for resale to their final consumers, from Generators located in the various States of the Federation.
During the process of generation, transmission and distribution of this peculiar form of merchandise, there is the occurrence of considerable deviations known by regulation as technical losses and non-technical losses of electrical energy.
The present study, as indicated by its title, is restricted to dealing with the supposed tax incidence on non-technical losses, also called commercial losses, as defined by Technical Note 035/2007 (SRD ANEEL):
- technical losses: constitute the amount of electrical energy dissipated between the distributor's energy supplies and the delivery points at the facilities of the supplied consumer or distributor units. This loss is due to the laws of Physics and can be of thermal, dielectric or magnetic origin; and
- non-technical losses: calculated by the difference between total losses and technical losses, therefore considering all other losses associated with the distribution of electrical energy, such as energy theft, measurement errors, etc. These losses are directly associated with the distributor’s commercial management.”
The theft of energy from the Electrical System presupposes the connection of clandestine points by fraudsters capable of promoting installations that divert it to delivery points not known by the Distributors, which are not registered in their customer identification systems and which have no legal-commercial relationship with them, so that this diverted energy cannot be measured or even billed, at least until the crime and its perpetrator are effectively identified[1].
Despite these findings, some States insist on charging ICMS on electrical energy diverted due to the crime of theft (the popular “cat”), as they consider that, given this advent, what they agreed to call an interruption of the deferral in relation to the operation that qualifies Distributors as tax substitutes for Geradoras would have occurred.
In the understanding of the Tax Authorities, the theft of electricity would result in the interruption of the deferred operation – of purchase and sale between Generators and Distributors – and, in this case, the ICMS would be levied on the value of that operation, immediately prior to the deferral, so that the calculation basis would become equivalent to its acquisition price, paid to the Generators by the Distributors.
Under such allegations, tax assessments were issued for the collection of ICMS, with the sole argument that the mere exit of the stolen energy, in light of what defines item III, §1, of art. 8th of Complementary Law nº 87/1996[2], would give rise to its collection, as if the deferred operation could be confused with some hypothesis of exemption or non-incidence, applicable to ordinary operations with goods in general.
Such charges, however, are completely inappropriate.
It cannot be forgotten, the application of the complex ICMS calculation system to electrical energy deserves caution, especially due to its physical characteristics that give it a peculiar form of commercialization.
And, as we intend to demonstrate below, the Brazilian constitutional system took care of this, so that, if analyzed in some depth, it is possible to verify that ICMS taxation does not apply to the electrical energy diverted due to its theft, a hypothesis in which the rightful taxpayer, the Distributors, did not even receive compensation for the consumption of the diverted energy.
2. THE TEMPORAL ASPECT OF ICMS ON ELECTRIC POWER AND THE HISTORICAL INTERPRETATION OF THE CONSTITUTION
The concept that electrical energy is a peculiar type of merchandise is common ground, and is even the object of the crime of uncertain theft in § 3 of article 155 of the Penal Code[3].
Once produced, electrical energy is instantly made available at the same time as body and wave, by the system that integrates its generation, transmission and distribution, to reach the final consumers at a speed of around 300,000 km/s;
Thus, it circulates constantly and instantly through this system, so that it cannot be stored, as its consumption occurs at the same time as it is produced.
In view of these physical and commercial peculiarities, the Brazilian constitutional system has always provided for a special form of taxation for electrical energy, taking into account the specificities of an instantaneous circulation chain that cannot be divided.
Thus, since the Federal Constitution of 1969, its taxation was already foreseen through a single tax, at that time, within the competence of the Federal Union, in a clear intention of the constituent legislator to guarantee that operations with electrical energy were taxed at a single moment, when it was consumed.
“Art. 21. It is the responsibility of the Union to institute tax on: (…)
VIII – production, import, circulation, distribution or consumption of lubricants and liquid or gaseous fuels and of electrical energy, a tax that will be levied once on any of these operations, excluding the incidence of another tax on them;”
The historical interpretation of the constitutional norm and the tax system leads to the observation that electrical energy has always been taxed at the moment its actual consumption occurred, this being the temporal aspect of its incidence hypothesis.
In fact, the taxation of electrical energy has long been in the form of a tax that falls solely on its consumption. Law No. 4,625 of 1922[4] already prescribed the charge of five réis for each kilowatt/light and two réis for each kilowatt/power actually consumed. Subsequently, Decree-Law No. 2,281 of 1940[5], which exempted companies generating and distributing electrical energy from federal, state or municipal taxes, expressly set aside the incidence of the tax on energy consumption. Also Decree No. 41,019 of 1957[6], the well-known “Water Code”, published a similar rule.
Decree-Law No. 7,219 of 1944, which provided for the “Consumption Tax”, stipulated its incidence on the monthly consumption of electricity, in the following terms:
“Art. 1º The consumption tax is levied on the following national or foreign products, detailed in the attached Tables: (...)
VIII – Electricity.
The tax is levied on:
Consumption of light and electrical power (…)
3% tax on amounts charged monthly for electricity consumption.”
Decree-Law No. 2,308 of 1954 gave rise to the single tax on consumption on electrical energy, which had to be collected by the user himself, providing for the following:
“Art. 3 Electricity delivered for consumption is subject to a single tax, charged by the Union in the form of consumption tax, paid by whoever uses it.”
Subsequently, this exaction was replaced by the former ““Tax on Operations Relating to Fuels, Lubricants, Electricity and Minerals of the Country”, with art. 74 of the National Tax Code, which, similarly, had to establish as a temporal aspect of its incidence hypothesis the effective consumption of electrical energy, through its availability to the final consumer. See:
“Art. 74. The tax, under the jurisdiction of the Union, on operations relating to fuels, lubricants, electrical energy and minerals in the Country has as a triggering event:(…)
V – consumption, understood as the sale of the product to the public.
§ 1 For the purposes of this tax, electrical energy is considered an industrialized product.
§ 2º The tax is levied only once on one of the operations provided for in each item of this article, as provided by law, and excludes any other taxes, whatever their nature or competence, levied on those operations.”
And it continues like this to this day, with the taxation of electrical energy being passed to the tax jurisdiction of the States, through the ICMS[7].
The Federal Constitution of 1988, through §9 of art. 34 of the Transitional Constitutional Provisions Act – ADCT, determined that operations with electrical energy are taxed at the time it is distributed to final consumers, with the ICMS calculated on the price then charged in this operation, namely, the amount actually billed to these consumers. And it specifically defined that these operations will take place under the tax substitution regime[8], as can be seen from a brief reading of the aforementioned constitutional provision that provides:
“Article 34. The national tax system will come into force from the first day of the fifth month following the promulgation of the Constitution, maintaining, until then, that of the 1967 Constitution, with the wording given by Amendment nº 1, of 1969, and subsequent ones. (…)
§9º Until a complementary law provides for the matter, theelectricity distribution companies, as taxpayers or tax substitutes, will be theresponsible, upon the product's departure from their establishments, even if destined for another unit of the Federation, for the payment of tax on operations related to the circulation of goods levied on electrical energy, from production or import until the last operation, calculating the tax on the price then charged in the final operation and ensuring its payment to the State or the Federal District, depending on the location where this operation must take place.”
It's there in §9 of the art. 34, in cold letters: ICMS will be due upon delivery of electrical energy to final consumers, customers of Distributor companies, calculated on the price then charged in this operation.
It should be noted that the Brazilian constitutional system has always ensured that operations with electrical energy were only taxed when it was effectively distributed to final consumers, especially in the case of the ICMS, as this would be the only plausible system for a type of merchandise that could not even be stored, with there being no gap between its production and consumption.
It can be easily seen that, in the case of electrical energy, the complex ICMS calculation system would never support its fractional taxation, reaching different moments in the consumption relationship.
This is the reason for the deferral, making the distributors responsible for paying the tax incurred in the previous operation (generator-distributor sale).
The Federal Constitution itself defined that operations with electrical energy were taxed through the deferral technique, by applying the regressive or “backward” tax substitution regime, precisely to ensure that the tax was applied at a single moment (when consumed) and was intended, for this reason, to that State where the electrical energy was actually consumed.
It should be noted that this is also the understanding of the Federal Supreme Court, which, when interpreting article 155, §2º, href="https://www.maneira.adv.br/artigos/cobranca-indevida-icms-sobre-energia-eletrica-furtada/#_ftn9">[9], stated that the entire proceeds from the ICMS collection on electrical energy operations belong to the State where its actual consumption occurred. Certainly, the ICMS will not apply to interstate operations that allocate electrical energy to other States, as can be inferred from a brief reading of this provision:
“Art. 155. It is up to the States and the Federal District to impose taxes on:(…)
§2º The tax provided for in item II will meet the following:(…)
X – will not apply:(…)
b) on operations that allocate oil to other States, including lubricants, liquid and gaseous fuels derived therefrom, and electrical energy;”
On the occasion of the aforementioned trial, the Hon. Minister Ilmar Galvão, as Rapporteur of the present case, dealt with the exegesis of article 155 of the Federal Constitution in accordance with the command inserted in §9 of article 34 of the ADCT, to assert that the incidence of ICMS at a single time, should only reach the final operation of distributing electrical energy to its final consumers, replacing the other stages of its production chain, as seen in this brief excerpt from the judgment:
“The transcribed constitutional provision does not discriminate between interstate operations intended for ICMS taxpayers and interstate operations intended for consumers. (…)
To ensure the collection of ICMS levied on operations relating to electrical energy intended for final consumers in another State, the constituent legislator itself provided, in paragraph 9 of article 34 of the ADCT, in this sense: (…)
In fact, the transcribed provision, by regulating, temporarily, the ICMS on electrical energy (“until the complementary law provides for the matter”), in fact, demonstrates the correctness of what was said above about the non-occurrence, in this case, of immunity, since it foresees the incidence of the tax, definitively, in the State of destination.”
It is clear that, from the analysis of the aforementioned constitutional provisions, the following guidelines can be extracted: (i) this is a transitional provision that is still in force; (ii) the discipline in question applies restrictively to electrical energy; and (iii) the distributors were assigned responsibility for the tax in the various operations carried out or that may occur.
It should be noted that the complementary governing legislation repeats the command of the aforementioned constitutional precepts, to mention the institute of tax substitution, as well as to determine that taxation only occurs at the moment when there is legal circulation between the electrical energy Distributors and the final consumer. This is exactly what Complementary Law No. 87/1996 says:
“Art. 9 The adoption of the tax substitution regime in interstate operations will depend on a specific agreement signed by the interested States.
§1º The responsibility referred to in art. 6th may be assigned:(…)
II – to companies that generate or distribute electrical energy, in internal and interstate operations, as taxpayers or tax substitutes, for the payment of tax, from production or import to the last operation, with its calculation being carried out on the price charged in the final operation, ensuring its payment to the State where this operation must take place.
§ 2º In interstate operations with the goods referred to in items I and II of the previous paragraph, which have the final consumer as the recipient, the tax levied on the operation will be due to the State where the purchaser is located and will be paid by the sender.”
This legal framework, therefore, determines that ICMS is levied only on the act of legal circulation of electrical energy, which occurs through its contracting and effective supply to the final consumer, with no legal provision supporting its incidence on the other stages of its circulation chain or, as some States claim, on the operation of acquiring electrical energy by Distributors, directly from Generators.
3. THE ABSENCE OF LEGAL PROVISION FOR THE INCIDENCE OF ICMS ON STOLEN ENERGY AND CLOSED TYPE
As initially demonstrated, there is no legal provision that supports the incidence of ICMS on operations prior to the activity of distributing electricity to the final consumer. And, in the same way, there is no legal provision for ICMS to be levied on the operation of acquiring electrical energy by Distributors, or for the tax to be charged at any other time in its production process, whether in generation or transmission.
The tax obligation invariably arises from law, which has exclusive competence to define the triggering event, the calculation basis, the applicable rates and respective incidence hypotheses, in the exact terms of article 97 of the National Tax Code[10].
There is no doubt, any intention of States to institute or collect taxes must be in accordance with the exact terms of the law, so tax collection can only survive if the legal fact relating to it is perfectly framed in the description contained in the incidence hypothesis, in strict respect for the constitutional principles of legality, contributory capacity and non-confiscation. If this were not the case, the States would find themselves authorized to collect amounts that do not belong to them, that do not concern them, collected in disagreement with constitutional tax precepts, as is the case with the incidence of ICMS on amounts relating to stolen electrical energy, clandestinely diverted from the electrical system.
Due to these constitutional principles, the application of the fact to the norm must be complete and the event that occurred in the phenomenal world must necessarily satisfy all the identifying criteria typified in the normative hypothesis, otherwise the tax incidence will not be configured. This is the peaceful understanding of the doctrine, as seen in these brief and enlightening words by Alberto Xavier[11], in verbis:
“(…) this distinction allows us to clearly understand why the definition of the calculation base is, by virtue of the principle of legality, an absolute reserve of formal law or typicality, a matter of exclusive competence of the Legislative Power, while the determination of the impossible base is a matter of the competence of the Executive Power.”
Under this bias sheltered by the Constitution, Donovan Mazza[12] Lessa concludes very clearly:
“The genesis of the tax obligation is umbilically linked to the law, as it is only the law that can institute the tax, and it is only on the basis of the law that the Administration can demand it. As Professor Sacha Calmon has long observed, the principle of legality in tax law is the founding principle of the taxpayer's main guarantees. In his Brazilian Tax Law Course, the Bahian master with a Minas Gerais heart teaches that the “priority, or annuality, or temporal lapse (principle of non-surprise to the taxpayer), typicality (specification of the content of the tax law) and non-retroactivity (denial of retrooper effect to the law) are sub-principles that flourish from the robust trunk of the principle of legality throughout history.”23 Going further, the Professor demonstrates that the principle of legality must be met at the formal level (with a normative act emanating from the legislative power) and material level (with the prediction of all the structural elements of the tax)24. For this reason, in Brazilian law the principle of legality is transformed into the principle of closed typicality, in which the entire matrix rule of taxation must be described in law.”
This is also the peaceful understanding of the jurisprudence on the subject, by pointing out the invalidity of administrative acts carried out to collect taxes without motivation or support in current legislation, based on mere presumptions, as can be seen from the summaries of the following judgments[13]:
“TAX. CORPORATE INCOME TAX. CONSOLIDATION OF MONTHLY BALANCE SHEET IN THE ANNUAL ADJUSTMENT DECLARATION. CREATION OF INSTRUMENTAL DUTY BY NORMATIVE INSTRUCTION. POSSIBILITY. ABSENCE OF VIOLATION OF THE PRINCIPLE OF LEGALITY TAXATION. COMPLEMENTATION OF THE MEANING OF THE LEGAL RULE.(…) It is well known that, highlighted in the tax field by article 150, I, of the Magna Carta, the principle of legality substantiates the need for the law to define, in an absolutely detailed manner, the tax types. – in a formal and material sense – must contain all the structural elements of the tax, whatever the hypothesis of incidence – material, spatial, temporal and personal criteria -, and the respective legal consequence, as determined by article 97, of the CTN.
This is exactly the case with the ill-fated ICMS charges on stolen electricity, which without any legal support, intend for the tax to reach an operation that is outside the scope of the incidence provided for by law, on a non-existent calculation basis (calculated based on the price of the energy sale operation by the Generators and Distributors) and in clear disregard for §9 of article 34 of the Constitutional Provisions Act Transient. Pudera, the ICMS, as taught by Roque Antônio Carrazza[14], will only apply to electrical energy sold between Distributors and final consumers, so that, for If there is any impact, the circulation of the goods is not enough, but it is essential that this circulation results from a legal operation that will indicate, as a rule, its opposable calculation basis: “The possible calculation basis for the ICMS levied on electrical energy is the value of the operation resulting in the delivery of this commodity (electrical energy) to the consumer. In another twist, it is the price of the electrical energy actually consumed, that is, the value of the operation resulting in the delivery of this commodity to the final consumer. This corresponds, in the terms of article 34, §9, of the ADCT, to the price then charged in the operation end.” The incidence of ICMS in the event of theft is unacceptable, simply because such operations do not even have a business nature. There are specific legal and constitutional provisions that regulate the incidence of ICMS on the distribution of electrical energy. Thus, when the theft occurs, in a stage prior to legal circulation and sale to consumers, it is clear that in this “operation” there is no “exit” chosen by legislation as giving rise to the incidence of ICMS. And, as provided in §9 of art. 34 of the Transitional Constitutional Provisions Act, electricity distribution companies are responsible, when the product leaves their establishments, for paying ICMS, which is calculated on the price then charged in the final operation. 4. THE INNOCURENCE OF THE GENERATING EVENT OF ICMS-ELECTRIC POWER IN THE “BACKWARDS” TAX REPLACEMENT IN CASE OF THEFT In accordance with article 155, item II, of the Federal Constitution[15], in line with article 12, item I, of Complementary Law no. 87/96[16], the taxable event for ICMS, as a general rule, is the departure of goods from the establishment of the respective taxpayer. The special rule is in the sale of electrical energy, because, in this case, what absolutely does not happen in the case of theft. Both §9 of art. 34 of the ADCT, as for item II, §1, art. 9 of Complementary Law No. 87/1996, always mention the institute of tax substitutionwhen dealing with the hypothesis of deferral in operations with electrical energy, the transfer of which through liability only occurs when the merchandise reaches its dealer and is resold by him, as well as determining that taxation occurs at the moment when there is legal circulation between the electrical energy Distributors and the final consumer. The regular supply of electricity and the price charged in the operation of its distribution to the final consumer are inseparable elements of the incidence hypothesis, so that it can be said with certainty that there is no legal circulation when distribution companies are prevented from billing due to the occurrence of theft. Roque Antonio Carraza[17], in the same sense, stated in an enlightening way: “The link between the generating plant and the distribution company does not typify, for tax purposes, an autonomous operation of circulation of electrical energy, it is, in fact, the necessary means to provide a single public service, to the final consumer, opening space for the collection, alongside this, of a single ICMS. (…) It is emphasized that this tax is levied on the carrying out of operations related to the circulation of electrical energy (which, we say again, at least for tax purposes, was considered by the Constitution as a type of merchandise). And such circulation can only be legal; not merely physical.” In the same line of understanding, Paulo de Barros Carvalho, in a didactic and conclusive way, defined it as follows[18]: “In order for ICMS to be taxed, the circulation of goods is not enough: it is essential that this circulation arises from a legal operation. Likewise, the performance of a communication service is not sufficient to establish the legal taxable fact of the said tax, making it necessary for such provision to result from a legal transaction. This is the reason why, in cases where the supply of electrical energy is the result of theft or any other type of fraud, The ICMS requirement in relation to such facts is inadmissible, as they lack that essential business character.” The Tax Authority's intention to impose a tax on stolen energy, arguing that the mere departure of electrical energy would lead to its collection, undermines basic legal concepts, in clear disrespect for inescapable constitutional principles. Now, it does not require further effort to conclude that in the commission of the crime of theft of electricity, its circulation occurs due to its diversion from the electrical system without there being a transfer of its ownership due to an economic fact provided with any type of legal relevance. The legal circulation of goods subject to ICMS, presupposes the transfer of ownership with the respective invoicing and the issuance of a tax document, based on a legal transaction signed between the parties, with payment of the consideration for their effective consumption in compliance with the principle of non-cumulative activity. This is even the understanding of the Superior Court of Justice which, when analyzing the incidence of ICMS on such operations, concluded that“if the energy is stolen before delivery to the final consumer, the taxable event does not occur, making it impossible to collect it based on the value of the previous operation, that is, the one carried out between the energy producing company and the energy distributor”. This is what can be seen from the following excerpts taken from the menu[19]: “TAX. SPECIAL RESOURCE. ICMS. ELECTRIC POWER. THEFT BEFORE DELIVERY TO THE FINAL CONSUMER. NON-INCIDENCE. IMPOSSIBILITY OF COLLECTING THE TAX BASED ON THE PREVIOUS OPERATION CARRIED OUT BETWEEN THE PRODUCER AND THE DISTRIBUTOR OF ENERGY. 1. The controversy boils down to defining whether energy stolen before delivery to the final consumer can be subject to ICMS, based on the calculation of the value of the last transaction carried out between the producing company and the company that distributes and sells the electricity. 2. According to the uniform doctrinal and jurisprudential position, consumption is the temporal element of the ICMS tax obligation levied on electrical energy, with the spatial aspect, by logical deduction, being the place where the energy is consumed. 3. The production and distribution of electrical energy, therefore, do not constitute, in isolation, a taxable event for ICMS, which is only improved with the consumption of energy generated and transmitted. 4. Thus, although the phases prior to consumption (generation and distribution) influence the determination of the energy calculation basis, as determined by arts. 34, para.
5. ICMS is no longer due in cases where it is lost due to “leaks in the system or as a result of illicit activity (theft), as there is no regular consumption, and the operation of electrical energy is absent under the tax legal aspect. 6. Special appeal not provided.” The v. The ruling cited above correctly established that, “in the event of a break in the energy circulation chain, the deferral regime is interrupted, and the ICMS must be charged taking into account only the value of the last electrical energy operation”. And the conclusion could not be any different if the deferral, in casu, takes place through the technique of tax substitution. As stated elsewhere, if the electrical energy produced by generating establishments - subsequently stolen - cannot be resold by distribution companies, then the facts described in the hypothesis of ICMS incidence for such operations did not occur and there is no event giving rise to the tax obligation for which responsibility was transferred by substitution. In other words, even if one could consider the simple departure of electrical energy from the Generator (the replaced one) as being the moment of occurrence of the triggering event, what matters is that the moment of attribution of responsibility to the Distributor (the substituted one) only arises when the electrical energy reaches it and is resold by it. If you do not receive it, and therefore do not resell it, there is no triggering event for the tax obligation subject to the replacement mentioned in the Constitution and complementary federal legislation. And, if it was not the Distributor that provided the electrical energy, under the condition attributed to it by the constituent legislator as an ICMS taxpayer, the economic magnitude necessary for the incidence of the tax does not even exist. 5. THE LEGAL TAX FACT AND THE ABSENCE OF A PRESUMPTIVE SIGN OF WEALTH It is a fundamental requirement for the characterization of taxes of an indirect nature - especially for those who subscribe to the theory of mandatory legal repercussion of the ICMS, as is the case of the author who dared to write this brief article -, the pre-existence of two figures inseparable from the connection of the factual legal transaction described in the incidence hypothesis: the taxpayer in law and the taxpayer in fact, necessarily identifiable. The existence of these two legal figures, in the case of ICMS, configures the evident intention of the constitutional legislator (which echoes in complementary federal legislation) to ensure that the legal repercussion of the tax burden authorizes the taxpayer of the respective obligation (the taxpayer in law) to demand from a third person (the taxpayer in fact) the corresponding reimbursement. It's exactly how Paulo de Barros Carvalho teaches[20]: “In effect, the legislator, when authorizing the legal repercussion of a given tax, creates two legal norms: (i) one, with the hypothesis of incidence being the realization of certain facts that, when occurring, gives rise to the tax obligation; (ii) another, in which the hypothesis consists of the realization of that same fact foreseen in the antecedent of the matrix rule of tax incidence, the same fact foreseen in the antecedent of the matrix rule of incidence tax, prescribing, consequently, reimbursement equivalent to the tax due. Professor Paulo de Barros further adds, concluding that“in taxes where there is a legal provision for repercussion, therefore, the incidence of the matrix rule, with the consequent birth of the tax obligation, leads to the emergence of a second legal link, in which the active pole includes the person who was a taxpayer of the tax obligation and, in the passive pole, another subject who must compensate him in relation to the tax paid. Therefore, the content of this second legal relationship consists of a credit right of the “de jure taxpayer”, against the traditionally called “de facto taxpayer”[21]”. What this is intended to say is that, although there are two distinct legal relationships, as explained above, both are decisive for the configuration of the contributory capacity as a constitutional primacy to be necessarily observed to configure the hypothesis of ICMS incidence, without which it is not possible to have taxation. The ICMS charge presupposes the legal repercussion of its burden, which cannot fall on the taxpayer in cases where he is unable to pass it on to end consumers. The Federal Constitution, when transferring the responsibility for paying the ICMS originally owed by the Generating companies, to the energy Distributors, assumes that the latter will reimburse the respective tax burden of their paying customers, the final consumers of the electrical energy supplied. Now, as default is a logical consequence of committing the crime of theft of electricity, it is clear that, in these cases, there is no contributory capacity that gives rise to tax obligation, since energy distribution companies will not even be able to reimburse the amounts they would pay, as ICMS, if they collected it from the public coffers. In fact, when there is theft, the Distributors (tax substitutes for the Generating companies), prevented from reselling the electrical energy that was diverted, would never be able to recover the amounts they would have incurred if they had paid the ICMS which should, according to the governing legislation, necessarily fall on their final consumer, in clear non-compliance with the constitutional principle of non-cumulativeness, inserted in item I, §2º, of article 155[22] from Magna Carta. It is clear that the Distributors – as taxpayers by law due to the tax substitution - could never bear the tax burden resulting from the undue collection of ICMS on stolen energy, since there would be no way, in this case, to pass it on to those who should effectively position themselves in the condition imposed by law, as de facto taxpayers, then final consumers of the diverted electrical energy. This understanding, which finds support in the doctrine of choice, is the object of an impeccable analysis by Hamilton Dias de Souza[23], as can be seen: “(…) b) tax substitution is only possible if it is in compliance with the principle of contributory capacity. Therefore, it is essential that the substitute can reimburse the amount paid as tax substitution. c) the tax substitute must have a link with the situation that constitutes the event generating the tax obligation. Such link must be, in fact or in law, either with the material fact (gross fact) or with the person who carried out such fact (taxpayer). Extension of the link arises from the very essence of the triggering event, mirrored by a factual situation defined by law which, to be sufficient to give rise to the tax obligation, must occur, concretely, in all its aspects, its indissoluble presuppositions. (…)” If the Distributors did not receive their share for the electrical energy they even supplied, unable to recover the tax that should not be borne by them, they lack a constitutionally foreseen assumption that makes the incidence of ICMS unfeasible: the ability to contribute. To conclude otherwise would be to admit, with due respect, that States were allowed to appropriate values that are not theirs, originating from a portion of the taxpayer's property without a legal provision for such. 6. THE DOUBLE TAXATION OF A CONSIDERABLE PORTION OF THE VALUES RESULTING FROM THE THEFT OF ELECTRIC POWER As is known, the federal regulations that regulate the Sector ensured that the so-called “commercial losses” (non-technical, among which theft is included) were included in the composition of the amounts paid by consumers, due to the use of energy distribution systems, as they are added to the tariffs for the purpose of forming the final price paid. In other words, a large part of the values attributed to stolen electricity make up the energy tariff charged in certain periods, at the discretion of the regulatory body, the National Electric Energy Agency – ANEEL, as a way of compensating for the amount diverted by this advent. Through a specific methodology that governs the setting of requests for tariff review[24], once the amount of energy “losses” classified as “regulatory” or “commercial”, determined in a given period, ANEEL defines the percentage to be effectively incorporated into the electricity tariff with the aim of encouraging distribution companies to combat the causes of energy diversion. This providential methodology for calculating tariffs for the use of electrical energy distribution systems is provided for by ANEEL Normative Resolution No. 166/2005, which provides: “Art. 12. The required distribution revenue will be segregated according to the TUSD components defined in this article. (…) § 2º The component of the tariff for the use of distribution systems, corresponding to the cost of using third-party distribution or transmission networks, called TUSD – Fio A, will be formed by the value of the following items: (…) V – electrical losses in the Basic Network, referring to the amount of technical and non-technical losses. (…) §4º The component of the tariff for use of distribution systems, corresponding to the cost of technical losses, is called TUSD – Technical Losses. § 5º The component of the tariff for the use of distribution systems, corresponding to the cost of non-technical losses, is called TUSD – Non-Technical Losses. (…)” This same Resolution, contains in its article 31 the definition for the values corresponding to the electrical energy to be billed, making it clear that both the technical losses and the commercial losses(among which, again, theft is included), are included – in percentages defined by ANEEL – in the composition of the amounts paid by consumers due to the use of energy distribution systems, in the following terms: “Art. 31. Distribution concessionaires or licensees must inform the respective consumers of Group “B”, on the supply invoice, the value corresponding to energy, distribution service, transmission, sectoral charges and taxes, observing the cost structure established in this article. § 1st The value corresponding to the energy must be defined, in R$, based on the sum of the amounts billed for the following items: I – Electricity Tariff – TE, except the item relating to System Service Charges; II – Losses in the Basic Network related to TUSD – Wire A; III – Technical Losses; e IV – Non-Technical Losses.” Now, if the values resulting from the theft are incorporated into the energy tariff in pre-determined percentages approved by ANEEL, they result in the inexorable conclusion that they have already suffered due taxation by ICMS. This indisputable finding is already the subject of legal actions in progress in some States, where it was found, following the example of the Court of Justice of the State of São Paulo, that intending to levy ICMS on stolen energy would be the same as incurring double taxation, as can be seen from these brief excerpts from the rulings: “(…) ICMS WRIT OF MANDAMUS. Request to remove the requirement for ICMS on commercial losses of electrical energy determined. Admissibility Sentence maintained. Appeals unlikely. The ICMS must be levied on the value of the electrical energy actually consumed and as long as the consumer is identified (…) Thus, for the purposes of calculating ICMS, only the electrical energy actually delivered and consumed must be considered, with the regular identification of its final consumer, without considering, therefore, the taxation of lost or stolen energy. It is also important to note that the value of these commercial losses (theft, measurement errors and even default) is included in the final price of billed energy.”
*** “ICMS – Electric energy – Inadmissibility of the incidence on commercial losses, resulting from diversions, theft (cats) and fraud – Only with the tradition of commercialized energy, with the final operation, consisting of delivery to the consumer, does the tax obligation arise – ICMS must, therefore, be levied on the value of the electrical energy actually consumed, without the diversion or theft being able to be taxed, even because Aneel already includes the value of these losses in the electricity bill– Applicable action Appeals not provided.” [26] The intention to tax such portions (non-technical losses) prominently, comes up against the prohibition that the legal-tax system expressly prohibits: double taxation (bis in idem), whose impact, if allowed, would be disastrous for the final chain of electricity consumption. 7. CONCLUSION Having made these brief considerations, it is possible to reach the following conclusions: BY ALEXANDRE JUNQUEIRA Bibliographic references: [1] The materialization of the irregularity resulting from the theft of electricity depends on the adoption of procedures provided for in ANEEL Resolution No. the values relating to their deviation are considered valid, for the purposes of charging and recovering revenue by the Distributors. [2] Article 8 The calculation basis, for tax substitution purposes, will be: (…) (…) III – any exit or event occurs that makes it impossible for the event determining the payment of the tax to occur.
Penalty – imprisonment, from one to four years, and fine.(…) § 3 – Electric energy or any other thing that has economic value is equivalent to movable property. [4] Art. 1st. The general revenue of the Republic of the United States of Brazil is budgeted at: [5] Article 1 – From January 1, 1940, all companies that produce or transmit or distribute electrical energy are exempt from any taxes federal, state or municipal, except for consumption, income and sales and consignments, which applies only to electrical material sold or consigned, and territorial and property rights on land or buildings not used exclusively for the purposes of administration, production, transmission, transformation or distribution of electrical energy and related services. Single paragraph – The provisions of this article apply to both companies that operate with hydraulic engines and those that operate with thermal engines. [6] Art 109. All companies that produce or merely transmit or distribute electrical energy are exempt from any federal, state and municipal taxes, except: a) income tax; b) consumption and commercial sales taxes levied on electrical material sold or consigned; c) territorial and property taxes on land and buildings not used exclusively for the purposes of administration, production, transmission, transformation or distribution of electrical energy and related services. Single paragraph. The provisions of this article apply to both companies that operate with hydraulic engines and those that operate with thermal engines. [7] This is what the Federal Constitution of 1998 provides: “Article 155. It is up to the States and the Federal District to impose taxes on: I – operations relating to the circulation of goods and the provision of interstate and intercity transport and communication services, even if the operations and services begin abroad; (…) § 2 The tax provided for in item II will meet the following: (…) X – will not apply: (…) b) on operations that allocate oil, including lubricants, liquid and gaseous fuels derived therefrom, and electrical energy to other States;” non-taxed. This is a deferral due to regressive tax substitution as defined by the Federal Constitution, which protects Distributors their right to credit accumulated by Generators due to the acquisition of inputs and goods for the latter's permanent assets. If the States were correct in their claim, the right to this credit would not subsist even if it were exempt or non-incidence. [9] SUMMARY: TAX. ICMS. LIQUID AND GASEOUS LUBRICANTS AND FUELS, DERIVED FROM PETROLEUM. INTERSTATE OPERATIONS. IMMUNITY FROM ART. 155, § 2º, X, B, OF THE FEDERAL CONSTITUTION. Tax benefit that was not established for the benefit of the consumer, but for the State of destination of the products in question, which will be responsible, in its entirety, for the ICMS levied on them, from shipment to consumption. Consequential disregard for the immunity thesis and the unconstitutionality of the legal texts, with which the company consuming the products in question intended to obviate, in this case, the tax requirement of the State of São Paulo. Appeal known, but dismissed. [10] Art. 97. Only the law can establish: I – the institution of taxes, or their extinction; II – the increase in taxes, or their reduction, except as provided in articles 21, 26, 39, 57 and 65; III – the definition of the event generating the main tax obligation, except as provided in item I of § 3 of article 52, and its taxable subject; IV – setting the tax rate and its calculation basis, except as provided in articles 21, 26, 39, 57 and 65; [11] 2002, p.39. [12] LESSA, Donovan Mazza, THE IMPOSSIBILITY OF JUDICIAL COLLECTION OF TAX ALREADY DECLARED UNCONSTITUTIONAL, EVEN IN THE FACING OF THINGS JUDGED FAVORABLE TO THE PUBLIC TREASURY, article published at http://sachacalmon.com.br/wp-content/uploads/2012/10/Artigo-Execu%C3%A7%C3%A3o-de-tributo-declarado-inconstitucional-e-coisa-julgada.pdf. [13] STJ, REsp 724.779/RJ, Rel. Minister LUIZ FUX, FIRST PANEL, judged in 12/09/2006, DJ 20/11/2006, p. 278. [14] CARRAZA, Roque Antonio, ICMS, Ed. Malheiros, 11th ed., 2006, p. 229. [15] Art. 155. It is up to the States and the Federal District to impose taxes on:(…) II – operations relating to the circulation of goods and the provision of interstate and intercity transport and communication services, even if the operations and services begin abroad;(…) [16] Art. 12. The taxable event is considered to have occurred at the time: I – the exit of goods from a taxpayer's establishment, even if to another establishment owned by the same owner; [17] CARRAZZA, Roque Antonio, ICMS, Ed. Malheiros, 11ª, 2006, p. 226. [18] DE CARVALHO, Paulo de Barros, Taxation in the Electric Sector, Ed. Quartier Latin, 2010, p. 33. [19] Superior Court of Justice, Second Panel, Rapporteur Minister Castro Meira, Special Appeal No. 1.306.356/PA, unanimous, DJe of 09/04/2012. [20] CARVALHO, Paulo de Barros, Taxation in the Electric Sector, Ed. Quartier Latin, 2010, p. 24. [21] CARVALHO, Paulo de Barros, Taxation in the Electric Sector, Ed. Quartier Latin, 2010, p. 24 and 25. [22] Art. 155. It is up to the States and the Federal District to impose taxes on: (…) II – operations relating to the circulation of goods and the provision of interstate and intercity transport and communication services, even if the operations and services begin abroad; (…) § 2º The tax provided for in item II will meet the following: I – will be non-cumulative, compensating what is due in each transaction relating to the circulation of goods or provision of services with the amount charged in previous ones by the same or another State or by the Federal District; [23] SOUZA, Hamilton Dias, ICMS – Tax Substitution, in Revista Dialética de Direito Tributário no. p. 25 and 26. [24] The so-called Annual Tariff Adjustment mechanism aims to reestablish the purchasing power of the revenue obtained through the tariffs charged by the concessionaire. The distribution concessionaire's revenue is made up of two portions: “Parcel A, represented by the company's non-manageable costs (sectoral charges, transmission charges and purchase of energy for resale), and “Parcel B”, which aggregates manageable costs (operation and maintenance expenses, capital expenses), in http://www.aneel.gov.br/area.cfm?idArea=95 [25] Court of Justice of São Paulo, Eleventh Chamber of Public Law, Reporting Judge Luis Ganzerla, Appeal no. 0001921-49.2011.8.26.0053, DJe of 01/24/2013. [26] São Paulo Court of Justice, Tenth Chamber of Public Law, Rapporteur Urbano Ruiz, Appeal no. 0013820-78.2010.8.26.0053, DJe dated 04.07.2011.
(RE 198088, Rapporteur: Min. ILMAR GALVÃO, Full Court, judged on 17/05/2000, DJ 05-09-2003 PP-00032 EMENT VOL-02122-03 PP-00618)
See other related news stories
Articles
Silent reimbursement and the risk of non-cumulative
January 7, 20264th, §7th, prohibits the discounting of credits for products that would be covered by the exemption or zero rate, but were partially reencumbered by art. 4th, §4th, item I, of LC 224/2025. In this way, the rule would have promoted...
Articles
The tax battle of funds: the case of Fiagro
September 30, 2025The tax battle for funds: the Fiagro case The future of taxation will define whether Brazil will continue to stimulate productive financing or give in to the tax revenue temptation Arnaldo Jardim, Eduardo Lourenço Real Estate Investment Funds (FIIs) and Investment Funds in...
Articles
Analysis: Rural producer in tax reform: less taxes, more competitiveness
September 23, 2025Analysis: Rural producer in tax reform: less taxes, more competitiveness There is little left for the tax reform to enter the testing phase. Because it is new, many prefer to defend chaos – especially because it is easier to oppose than...
Articles
The principle of tax neutrality and the issue of default
May 13, 2025Summary: This article problematizes the effectiveness of the principle of tax neutrality in the new Brazilian consumption taxation model established by Constitutional Amendment No. 132/2023, with special attention to the absence of a legal provision on the return of IBS/CBS in...
