An import operation requires the payment of expenses and payment of specific federal and state taxes. Among the costs that need to be paid when nationalizing the imported cargo, ICMS can often be the most significant, as its rate is one of the highest compared to the others, usually between 17% and 18%.
There are ways to reduce the disbursement of this tax and have less impact on the importer's pocket, and that is what we are going to deal with in this article.
What is Import ICMS?
The Tax on Circulation of Goods and Provision of Services, commonly called ICMS, is a tax under state jurisdiction, that is, its collection is reverted directly to the state where the company is headquartered - the same goes for companies in the Federal District and its regulations is in art. 155, II, and §2, IX, of the Federal Constitution (CF).
When talking about ICMS Imports, the generating factor of the tax is the moment when the products assume the role of effectively nationalized, that is, it is understood that the collection needs to be done through customs clearance of the cargo (after registration of the DI and collection of federal taxes).
What is the ICMS for?
The ICMS is one of the most important taxes for state finances: it is responsible for almost 80% of the entries in government coffers and for funding the functioning of the public machine.
The amounts collected through the payment of ICMS are used to pay for improvements in community services, such as the recapping of damaged roads, and to cover expenses with public health, education, sports and culture. Furthermore, the Brazilian Constitution requires that part of the amount collected (approximately 25%) be transferred to the municipalities, which are responsible for applying the receipt as they deem necessary.
What is the value of import ICMS?
As a rule, every tax varies according to the value of the transaction. The same happens with the ICMS on imports, which can be calculated by multiplying the rate in force in the company's headquarters state by the tax calculation base. In the case of state tax, the base will be the sum of the CIF value and all federal taxes, plus the Siscomex and AFRMM rate.
It is important to remember that ICMS is a tax that integrates its own base, that is, it is calculated “from the inside”. After the summation, it is necessary to divide the amount found by subtracting 100% minus the state tax rate. For example: If the sum was R$100.00 and the current rate is 18%, we will have: 100/(100%-18%), that is, the ICMS calculation base is R$121.95.
Is it possible to reduce or not pay ICMS on import?
Yes. There are mechanisms that guarantee the reduction of disbursements or even tax exemption, but to be able to apply them, it is necessary to correctly frame each import operation.
At the federal level, one of the most important possibilities for reducing ICMS is for operations with machinery and equipment. Agreement 52/1991, which aims to implement industrial production, reduces the tax calculation basis so that the final rate is 8.8%, instead of the 17%, 18% commonly applied to other items. This agreement lists the NCMs and the types of equipment that would fall under this reduction, that is, not all items that can benefit from it, requiring a prior analysis of the operation for correct application.
ICMS is a state tax, so it is assumed that each state is free to apply different forms of collection and tax benefits at its own discretion. In Santa Catarina and Paraná, for example, the TTD 410 and Paraná Competitivo, respectively, guarantee the collection of entry ICMS at a very low rate for goods destined for resale.
In Rio Grande do Norte there is a benefit that reduces the ICMS rate on entry and is specific for wholesale companies that fall within a certain quarterly billing. In Rondônia, on the other hand, the benefit is guaranteed in the form of a presumed credit on the amount of ICMS provided for at the time of sale of those products.
On the other hand, some import operations may even have ICMS tax exempt, as in the case of solar panels, used in energy generation, for example. For these products, it is previously established that no tax will be paid at any time.
Another case of not immediately collecting the tax is the deferral of ICMS, that is, the application of collection in different ways. In the state of Minas Gerais, for example, it is possible to claim with SEFAZ the deferral of 100% of the amount that would be paid by the state tax for imports of goods for fixed assets. In other words, there would be no immediate disbursement in cases of deferred claims.
It is understood that the collection of ICMS is a substantial part of an import operation, since the rate tends to be one of the highest among the applicable taxes.
For this reason, it is important to carry out a careful analysis of the operation, in order to understand if there are mechanisms for reducing the collection or even if the goods can be included in any payment exemption option.
However, it is important to understand that ICMS is a debit and credit tax, that is, even if the disbursement in the import operation takes place, it can be accounted for in the accounting calculation and credited at the time of sale, when applicable.
For this reason, it is not advisable to pay a little at the entrance, through collection with reductions, for example, if it is necessary to pay a lot at the exit.
Having a detailed analysis of the operation as a whole can be a differential when it comes to verifying the feasibility of the import process, we can help you with that. Do you want to know more about our advisory service? Please contact us, it will be a pleasure to serve you.