Brazil second VAT implementation bill
- Americas News
- Jul 15, 2019 | Richard Asquith
A second bill to consolidate a plethora of Brazilian indirect taxes has been presented to the Senate on 9 July 2019. The Chamber of Deputies is already reviewing an alternative Brazilian VAT bill.
A new state VAT being proposed is made up of two taxes: Imposto sobre Operações com Bens e Serviços (‘IBS’); and a selective federal tax (Imposto Seletivo) on a limited number of taxable supplies, including fuel, cars, telecoms, alcohol and cigarettes. The bill envisages a 15-year transitional period to enable management of any tax losses by states as they withdraw their local taxes.
The indirect taxes to be consolidated by IBS are:
1. ICMS – state tax on the movement of goods; also levied on communication supplies
2. COFINS – federal tax, funding social security
3. ISS – municipal tax on services
4. IOF – federal financial services tax
5. PIS – federal levy for social integration
6. IPI – federal tax on industrial goods
7. Salário Educação – contribution to the national education fund
8. CIDE – fuel levy
The Chamber of Deputies has just set-up a review committee for its alternative proposal, which would include a 10-year consolidation of fewer taxes.
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