Imposition Types

Question 1

ICMS

Answer 1

Imposto sobre Circulacao De Mercadorias e Servicos - ICMS is state sales tax due on the physical movement of merchandise. Also levied on inter-state and inter-municipal transport services, communications and electricity.

Question 2

IPI

Answer 2

Imposto sobre Produtos Industrialzados - IPI excise tax on all good imported or manufactured in Brazil.

Question 3

ISS

Answer 3

Imposto Sobre Servicos - ISS is a municipal tax on gross billings for services. Services are defined by federal law but each municipality can have it’s own taxed services.

Question 4

COFINS

Answer 4

Contribuicao para o Finaciamento da Sequridade Social - Social contribution on billing. A social contribution for funding social welfare programs. Gross receipts from supply of goods and services.

Question 5

PIS

Answer 5

Programa de Integracao Social - Contribution to the social integration program. Used to fund unemployment insurance program. Gross receipts from supply of goods and services.

Question 6

ICMS - Applicability

Answer 6

Standard rate of 17%, 18% in Minas,Gerals, Sao Paulo, and Parana. 19% in Rio de janeiro. For inter state sales the rate is reduced (7 or 12%). Applied to goods imported and sold in Brazil where similar goods are available in Brazil. Goods subject to industrial process after customs clearance that have 40% or more imported content. There is a lower rate for some specific goods and services.

Question 7

CONFAZ

Answer 7

National Council of Fiscal Policy

Question 8

IPI - Applicability

Answer 8

Tax charged on an ad valorem rate according to the type o product as per the International Harmonized Commodity Description and Coding System. Rates rant from zero to a maximum of 333% but average 10%. There are an extensive list of products that are zero rate or exempt.

Question 9

ISS - Applicability

Answer 9

The standard rate of ISS is 5%. Rates can vary from one municipality to another.

Question 10

PIS - Applicability

Answer 10

The standard rate is 1.65%. Reduced rates exist for certain products and services. Exports are exempt.

Question 11

COFINS - Applicability

Answer 11

The standard rate of 7.6%. Reduced rates exist for certain products and services. Exports are exempt.

Question 12

Export of Goods and Services

Answer 12

Have tax immunity - exempt

Question 13

Import of Goods

Answer 13

II (import duty), ICMS, IPI, PIS/COFINS paid by the taxpayer legally registered in the country.

Question 14

Import of Services

Answer 14

The company importing the service is responsible for paying ISS, PIS and CONFINS. The non resident is not obligated to register in Brazil and will not be responsible for any taxes.

Question 15

Taxable Base Amounts for Domestic Supplies

Answer 15

Value of the transaction plus expenses charged - insurance and freight. Conditional discounts are part of the taxable base.

Question 16

Taxable Base Amounts for Imported Goods

Answer 16

Import tax applies to the Cost, Insurance and Freight (CIF). The base amount for ICMS is CIF + Import Tax, IPI, PIS, COFINS and ICMS.

Question 17

When is VAT/GST due on supply of goods and services?

Answer 17

ICMS and IPI are triggered is the circulation of products for domestic supplies and customs clearance of imported goods. ISS is triggered when services are rendered. PIS and COFINS is the receipt of revenue.