ICMS exemption on electric and electronic equipment take-back operations

Under Federal Law No. 12,305/2010, which establishes the Brazilian Solid Waste Policy, manufacturers, importers, distributors, and sellers of electrical and electronic equipment (EEE) must run take-back systems to ensure that end-of-life EEE is collected and recovered/disposed of in an environmentally sound manner.

One of the main challenges to the implementation of take-back systems is the tax burden on collection, recovery, and disposal operations, including transport activities.

To address such challenge, the National Treasury Policy Council (CONFAZ) signed ICMS Agreement No. 99/2018, which authorises nine Brazilian States (AL, AM, BA, ES, PR, PE, RJ, SC, and SP) to exempt EEE take-back operations, including transport within their respective territories, from the state, value-added tax on the circulation of goods and services (ICMS in the Portuguese acronym).

Each of the nine States will be responsible for implementing the tax exemption within their own territories and defining the necessary operational procedures.