Brazil's Supreme Court Upholds Tax Incentives for Agrochemicals

Overview

• The judgment concluded Thursday with Nunes Marques voting to maintain the benefits, producing a 6–2–2 outcome that upholds the incentives.
• The cases targeted Convênio ICMS 100/1997, which reduced the ICMS base and allowed exemptions for farm inputs, as well as IPI zero rates and a constitutional provision enabling a differentiated regime for agro inputs.
• Cristiano Zanin, Luiz Fux, Dias Toffoli, Alexandre de Moraes, Gilmar Mendes, and Nunes Marques formed the majority, arguing the relief recognizes essential production inputs under strict oversight by Mapa, Ibama, and Anvisa.
• Relator Edson Fachin and Cármen Lúcia dissented, contending the Constitution requires an environmentally calibrated tax system that does not privilege products harmful to health and the environment.
• Flávio Dino and André Mendonça supported partial constitutionality and urged periodic, evidence-based review of the fiscal policy to prioritize less toxic and more efficient products.