Brazil Supreme Court pauses telecom ICMS surcharge until 2027

The Brazilian Supreme Court unanimously ruled that the additional 1% ICMS levy on telecommunications services in Alagoas, intended for the State Poverty Combat Fund, lost efficacy after the adoption of Complementary Law 194/2022. The decision was modulated to take effect only from 1 January 2027, preserving amounts already collected. The case (ADI 7632) was brought by the National Association of Mobile Operators and the Association of Fixed-Line Service Concessionaires, and the court noted that a previous 2% surcharge had already been repealed by state law.

Separately, the National Council of Fiscal Policy (Confaz) published a series of protocols (ICMS Nos. 53‑87/2026) that revise the rules for ICMS substitution tax and suspension across many sectors, including construction materials, electronics, appliances, IT equipment, cleaning products, and animal feed. Most provisions become effective on 1 August 2026, with some specific rules taking effect on 1 September 2026. Companies operating in these markets will need to adjust invoicing, tax calculation and compliance procedures accordingly. Together, these actions represent a significant shift in Brazil’s ICMS tax framework.