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Brazilian Ports War triggers new legislation for inter-state transactions

15 November 2012

ITR Correspondent


Renata Correia Cubas, of Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados, explains why state VAT incentives for imported goods are causing problems for Brazilian taxpayers.

Brazilian taxpayers have sought a reduction in state VAT incentives granted to import transactions, and also in the tax credits arising from inter-state transactions of imported goods in recent years.

Under Brazilian law, the state VAT rate applied to inter-state transactions is between 7% and 12% depending on the states involved.

Payment of the VAT generates a tax credit against the state of destination of those goods, which is often not fully charged in the state of origin upon customs clearance of the goods. Most states offering incentives...



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