VAT regime proposal for Brazil
In late May, the Justice and Constitution Commission of Deputies passed this bill. This bill will now move on to the Chamber of Deputies and Senate for review.
Imposto Único sobre Bens e Serviços (‘IBS’) will be the name of the new VAT regime and the implementation could take up to ten years. IBS will replace a number of different consumption taxes:
- ICMS – This is a sales tax – A tax on the circulation of goods and transportation and communication services
- IPI – This is a federal excise tax – A tax on industrialized goods
- ISS – This is a municipal services tax
- COFINS – This is a social contribution for social security financing
- PIS – This is a federal levy for social integration
Brazil announced it’s new VAT regime back in 2017, due to the country having one of the most complex indirect tax regimes in the world.