Brazil simplifies interstate VAT on imports

From 1 May 2013, a unified regime for trading goods between Brazilian states following importation is to be introduced. The aim is to reduce the levels of double taxation on goods’ movements across state lines.

Brazilian VAT ICMS (Imposto sobre a Circulação de Mercadorias e Serviços) is currently charged at between 7% and 12%, depending on the nature of the goods being moved across state borders. This will now be simplified to a single 4% rate.

This new regime applies to most goods, including goods to be processed provided the processing does no increase the value by more than 2.5 times.