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Brazilian VAT ICMS tax reform falls over

  • VAT
  • 25 March 2013 | Richard Asquith

Brazilian VAT ICMS tax reform falls over

Plans to simplify one of the most complex indirect tax regimes in the world has stalled as Brazil fails to agree on intra-state sale tax regimes.

Currently, Brazilian VAT ICMS is set be the individual 26 federal states. As a result, the rules are confusing, and rates vary from between 7% and 12%. For several years, the state government has been attempting to align all regions at 4%. This required to the creation of a complex compensation fund.

However, this month, plans to introduce the new, single rate for 2014 were scuppered and now face a long, further delay.

Brazil is facing similar problems to India, which is also trying to align its states around a single Indian GST regime.


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.