Brazil: Guidance on tax on industrialized products (IPI), state sales tax (ICMS)

Reports on developments concerning tax on industrialized products and state sales tax

Reports on developments concerning tax on industrialized products and state sales tax

The KPMG member firm in Brazil prepared reports on the following developments concerning the tax on industrialized products (IPI) and state sales tax (ICMS):

  • Consultation Solution No. 216 (published 2 October 2023) clarified that the IPI exemption provided for in art. 1st of Law No. 8,989, of 1995, generally applies to vehicles originating from countries in relation to which equal tax treatment has been guaranteed through an international agreement or convention, acquired for use in autonomous transport of passenger in the rental category (taxi), or purchased by people with physical, visual, or severe mental disabilities.
  • RFB Executive Declaratory Act nº 3 (published 6 October 2023) introduced changes effective 1 November 2023 to the tax incidence table for IPI (TIPI) due to of changes promoted in the Common Mercosur Nomenclature (NCM) by Gecex Resolution No. 499, of 21 July 2023.
  • Consultation Solution No. 242 (published 30 October 2023) clarified that the packaging of products in boxes that enhance them, by providing additional utility, in the sense of integrating them into the customer's production process, is characterized as industrialization for IPI purposes.
  • The 1st section of the Superior Court of Justice (STJ) unanimously held (EAREsp case no. 1,775,781) that ICMS credits may be claimed in connection with the acquisition of intermediate products that are gradually consumed or worn out in the production process, as long as there is proof of the need for these products for the activity main company.

Read a November 2023 report (Portuguese) prepared by the KPMG member firm in Brazil


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