Guidance in Brazil concerns a substitution regime and a system for advance payments of ICMS with respect to certain transactions. The rules generally are effective beginning 1 January 2015.
The ICMS—Imposto sobre Circulação de Mercadorias e Serviços—is a state-level sales tax imposed on the physical movement of merchandise. The ICMS is also levied on certain inter-state and inter-municipal services.
The guidance—Convênio ICMS n° 92/15 (August 2015)—provides a list of assets that may be subject to tax substitution regime or advance payments of ICMS related to transactions concerning the following goods (among others): auto parts, beverages, fuel, electricity, tools, cleaning supplies, food products, grains, and animals, as well as the sale of goods by a door-to-door system.
The guidance includes a seven-digit identifying product code (CET) that the taxpayer must include in its tax returns relating to the transaction.
Read a September 2015 report (Portuguese) prepared by the KPMG member firm in Brazil: Código Especificador da Substituição Tributária
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