Brazil

Details

  • Service: Tax, International Corporate Tax
  • Type: KPMG information
  • Date: 10/18/2013

Tax News: Tax Basis Reduction on Import Transactions 

On March 20, 2013 the Brazilian Supreme Court issued a decision Extraordinary Appeal “RE” 559.937 in the sense that the tax basis of PIS/COFINS–Imports (social contributions due upon imports) should not comprise the VAT (ICMS) and the PIS/COFINS themselves, on the contrary of the wording foreseen in the legislation (Law 10,865/2004).

As a consequence of the above mentioned decision, federal Law 12,865/2013, published in the Official Gazette on Oct 10th, 2013, amended Law 10,865/2004, in order to change PIS/COFINS tax basis.

According to this new provision, the tax basis for PIS/COFINS-Imports is the customs value for the import of goods and, therefore, the new tax basis does not include VAT (ICMS) and the PIS/COFINS themselves. It is worth noting that since II (customs duties) and IPI (excise tax) are included in the tax basis of ICMS, this legislation change also indirectly reduced the mentioned taxes amounts from the PIS/COFINS-Imports tax basis.

In line with the new legislation change, the Brazilian Federal Revenue Service issued the Normative Instruction 1,401/2013, which regulates the method for the calculation of PIS/COFINS-Imports. The new tax basis reduction has immediate effects, as of Oct, 10th, 2013.

Finally, it is worth mentioning that no changes were made on PIS/COFINS tax basis for the import of services.

 

For more information, please contact a tax professional with KPMG in Brazil:

 

Marienne Coutinho, mmcoutinho@kpmg.com.br
Ericson Amaral, eamaral@kpmg.com.br
Murilo Mello, mrodriguesdemello@kpmg.com
Roberto Haddad, robertohaddad@kpmg.com.br
Julio C. de Cepeda, jcepeda@kpmg.com.br
Carlos Eduardo Toro, ctoro@kpmg.com.br
Valter Shimidu, vshimidu@kpmg.com.br
Cecilio Schiguematu, cschiguematu@kpmg.com.br
Marcus Vinícius Gonçalves, vslemenian@kpmg.com.br
Marcus Oliveira, moliveira@kpmg.com.br
Adriano Ponciano, ajponciano@kpmg.com.br

 

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