ES companies can use ICMS credit balance for investment projects until March

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Companies based in Espírito Santo that are interested in expanding their operations using ICMS credit balances must submit their proposals for analysis by the Development Secretariat (Sedes) by March 1st. The balances are accumulated as a result of operations and installments that send goods abroad, through the Productive Investment Project (Proinp).

Proinp was instituted by Law 11,001/2019 and is regulated by Decree No. 4524-R/2019 and by Ordinance Sedes R 136/2019. In general terms, the companies holding accumulated credits – provided they present a productive investment project of relevant social and economic interest, and after approval of the project by Headquarters – may transfer ICMS credits to third parties.

According to the undersecretary for Competitiveness and Structuring Projects at Sedes, Rachel Freixo, the measure contributes to the expansion of industrial activities. “Many times companies want to increase their production, building a new factory, for example, but they don’t have enough money to start this project. With Proinp, this company will be able to transfer the ICMS credit balance to third parties and, thus, obtain financial resources to start this new venture, making Espírito Santo even more competitive on the national scene, generating new investments, creating new jobs, mainly, and consequently more wealth, income and quality of life”, he explains.

The Secretary of State for Development, Marcos Kneip, points out that exporting establishments will be able to present a unified project. “Let’s assume that three small companies from the stone sector have an ICMS credit balance and want to invest in a single project to build solar energy production, they will be able to unite and present a single project that will benefit the entire group. This is a positive proposition for the entire production chain,” he says.

In addition to being applied to new projects, the accumulated ICMS credit balance may also be used by the exporting establishment or transferred to third parties to offset tax debts, filed or not, whose taxable event occurred up to December 31, 2018.

Sedes is responsible for the social and economic analysis of the project. Once approved, the project proceeds to other credit transfer and monitoring procedures with the Treasury Department, and in cases of payment of tax debt, the State Attorney General’s Office (PGE) will also intervene.

Projects must be sent to Headquarters, via the e-Docs system, through the portal to the recipient of the group “Projeto de Investimento Productivo – Poinp”.

Companies with approved projects will have a period of four years to complete the proposed investments. Failure to meet the deadline may result in a fine of 25% on the amount of the approved credit, and Headquarters will be responsible for overseeing the project.

Source: Sedes/Aderes/Ipem Communication Office – ES Government