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Brazil second VAT implementation bill


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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VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.
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