Brazil: Overview of indirect tax changes effective in 2022
Changes include measures concerning the ICMS, PIS, and COFINS.
Effective in 2022
Changes relating to indirect taxes effective in 2022 include measures concerning the ICMS, PIS, and COFINS.
- ICMS—Imposto sobre Circulação de Mercadorias e Serviços—is a state-level sales tax imposed on the physical movement of merchandise.
- PIS (programa de integração social) refers to an employees’ profit participation program, and COFINS (contribuição para o financiamento da seguridade social) refers to a social contribution program for social security financing.
Overview
- Law No. 190/2022 (Lei Complementar nº 190/2022) concerns the collection of the ICMS tax differential related to interstate transactions and services intended for the final consumer.
- Provisional Measure No. 1095/2021 revoked the reduction of the PIS / COFINS tax burden on imports and on revenue from the sale of various inputs used by petrochemical and chemical sector industries. A special regime for the chemical industry (Regime Especial das Industrias Químicas—REIQ) was expected to be phased out gradually, and end completely in 2025. The provisional measure must be converted into law, and Congress has until the beginning of June 2022 to act.
KPMG observation
In Brazil, a provisional measure (Medida Provisória) is an “act” issued by the president, with the authority of law until it is later approved by the national legislature. Until it is transposed into law, a provisional measure generally is effective from its date of publication for a 60-day period (subject to an extension for an additional 60-day period (for a total of 120 days)).
- With Decree No. 10,923/2021, a new version of IPI (an excise tax) was approved, and certain prior guidance items were revoked.
- The state government of São Paulo introduced changes to its ICMS rules.
Read a January 2022 report (Portuguese) prepared by the KPMG member firm in Brazil
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.