What is ICMS?

ICMS is a state tax levied on the circulation of goods and the provision of certain services, such as interstate and intercity transportation. Each Brazilian state sets its own rate, and the revenue is used to finance public services, such as infrastructure and education.

Who pays ICMS?

ICMS is paid by companies and individuals who carry out commercial transactions with taxable products, that is, all products purchased or services contracted in Brazil have an ICMS rate included in the value. In foreign trade, it is levied mainly on imports, both for resale and for the company’s own consumption.

Who is exempt from ICMS?

Exports are exempt from ICMS, as provided for in Complementary Law No. 87/1996 (Kandir Law). The objective is to make Brazilian products more competitive in the international market. In addition, some operations, such as shipments to the Manaus Free Trade Zone and certain essential goods, may also be exempt or have their tax base reduced.

The impact of ICMS on foreign trade

For importers, ICMS can represent a significant cost, as it is charged on the value of the goods plus freight, insurance and other taxes, such as II (Import Tax). Depending on the state, the rate can vary between 17% and 25%. In exports, the exemption avoids the so-called “cascade effect”, allowing Brazilian products to have more competitive prices abroad.

Why rely on an expert?

Errors in the collection of ICMS can result in fines and delays in the release of the cargo. Companies that import or export must ensure that all documentation is correct and that taxes are paid in accordance with current legislation.

ICMS is a complex tax, with several ways of calculating, and its correct application requires technical knowledge. Having a freight forwarder and a customs broker helps you avoid tax issues and optimize costs in import and export. These professionals ensure that your company complies with all legal requirements and takes advantage of available tax benefits.

If you want security and efficiency in your international operations, BR Company can help you. Our team specializes in international transportation and customs clearance, ensuring complete solutions with tax compliance and hassle-free operations.

Contact us and find out more!