Brazil VAT implementation
- Americas News
- Apr 9, 2019 | Richard Asquith
The Brazilian Chamber of Deputies is considering a bill (PEC 294/2004) to implement a Value Added Tax regime, consolidating a range of federal, state and municipal indirect taxes. Brazil's indirect tax regime is frequently cited as the most complex in the world, with federal and 26 state varying rules.
The new consolidated federal tax, Imposto Único sobre Bens e Serviços(‘IBS’) will take a total of 10 years to introduce. It will first require approval by parliamentary commissions before progressing.
IBS would be levied on the supplies of goods and services, including intangible services.
Combining taxes into IBS
IBS will replace several different consumption taxes:
- ICMS – state tax on the movement of goods; also levied on communication supplies
- COFINS – federal tax, funding social security
- ISS – municipal tax on services
- PIS – federal levy for social integration
- IPI – federal tax on industrial goods
10-year implementation plan
Initially, COFINS and IBS will be reduced to 2% for two years. In the following 8 years, the other taxes will all be gradually reduced to a single rate for the full launch of IBS.
Latest Brazilian news
February 23, 2019
With the transition of Government at the beginning of this year, much has been said about the possible tax changes that the Federal Government will propose in order to increase revenues.
January 19, 2019
The Brazil Special Committee on Tax Reform has published details of its proposal to replace the existing range of indirect taxes with a world-standard Value Added Tax regime
November 23, 2018
Brazil’s new President-elect, Jair Bolsonaro, has said he is considering introducing a Value Added Tax (VAT) in a bid to streamline the existing ICMS, ICI and other complex indirect taxes
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