Brazil introducing VAT
Brazil currently has one of the most complex indirect tax regimes in the world. However, the country has now announced its plan to combine its current indirect taxes into a single VAT (Value Added Tax) regime.
The single Value Added Tax regime is intended to be state-wide. It will combine the country’s current consumption taxes, which include:
- ICMS (Imposto sobre Operações Relativas à Circulação de Mercadorias e Serviços de Transporte Interestadual e Intermunicipal e de Comunicações),
- ISS (Imposto sobre Serviços),
- IPI (Imposto sobre Produtos Industrializados),
- COFINS (Contribuição Social para o Financiamento da Seguridade Social).
The new regime aims to reduce the complexity of the current consumption tax regime. Details of the new VAT regime, and implementation date, has yet to be confirmed.
Brazil is not the only country to introduce a new VAT regime. The United Arab Emirates and Saudi Arabia will introduce VAT from January 2018, becoming the first countries in the Gulf Cooperation Council (GCC) to have a VAT system
If you have any queries on the new regime or you are worried that your business is not prepared, please contact our VAT Consulting team for free bespoke advice.