Menu
  • Locations
  • About Us
  • Services
  • Experts
  • News & Knowledge
  • Hot Topics
  • Culture & Career
  • Locations
  • Search
  • Press
  • Events & Webinars
  • CI Guide
  • Contact
  • Albania
  • Angola
  • Argentina
  • Armenia
  • Australia
  • Austria
  • Bangladesh
  • Belgium
  • Benin
  • Bolivia
  • Bosnia & Herzegovina
  • Botswana
  • Brazil
  • Bulgaria
  • Burkina Faso
  • Burundi
  • Cambodia
  • Cameroon
  • Canada
  • Chile
  • China
  • Colombia
  • Costa Rica
  • Croatia
  • Cyprus
  • Czech Republic
  • Denmark
  • Dominican Republic
  • Ecuador
  • Egypt
  • El Salvador
  • Estonia
  • Finland
  • France
  • Georgia
  • Germany
  • Ghana
  • Gibraltar
  • Greece
  • Guatemala
  • Guinea
  • Honduras
  • Hong Kong
  • Hungary
  • Iceland
  • India
  • Indonesia
  • Iran
  • Iraq
  • Ireland
  • Israel
  • Italy
  • Ivory Coast
  • Japan
  • Kazakhstan
  • Kenya
  • Korea
  • Kyrgyzstan
  • Laos
  • Latvia
  • Lithuania
  • Luxembourg
  • Macao
  • Madagascar
  • Malaysia
  • Mali
  • Malta
  • Mauritius
  • Mexico
  • Moldova
  • Mongolia
  • Montenegro
  • Morocco
  • Mozambique
  • Myanmar
  • Namibia
  • Nepal
  • Netherlands
  • New Zealand
  • Niger
  • Nigeria
  • North Macedonia
  • Norway
  • Pakistan
  • Panama
  • Paraguay
  • Peru
  • Philippines
  • Poland
  • Portugal
  • Puerto Rico
  • Romania
  • Rwanda
  • Saudi Arabia
  • Senegal
  • Serbia
  • Seychelles
  • Singapore
  • Slovakia
  • Slovenia
  • South Africa
  • Spain
  • Sri Lanka
  • Sweden
  • Switzerland
  • Taiwan
  • Tanzania
  • Thailand
  • Togo
  • Trinidad and Tobago
  • Tunisia
  • Turkey
  • Turkmenistan
  • Uganda
  • Ukraine
  • United Arab Emirates
  • United Kingdom
  • Uruguay
  • USA
  • Uzbekistan
  • Venezuela
  • Vietnam
  • Zambia
  • About Us
  • Our CEO
  • Our Supervisory Board
  • Our Global Executive Team
  • Quality, Process & Risk Management
  • Sustainability & Tax at WTS Global
  • Customs
  • Financial Services
  • Global Mobility
  • Indirect Tax
  • International Corporate Tax
  • Mergers & Acquisitions (M&A)
  • Private Clients & Family Office
  • Sustainability & Tax
  • Tax Certainty & Controversy
  • Tax Technology
  • Transfer Pricing & Valuation
  • Real Estate
  • Digital Tax Law
  • European Tax Law
  • Latest News
  • Brochures
  • Newsletters
  • Surveys & Studies
  • Pillar Two
  • FIT for CBAM
  • Tax Sustainability Index
  • ViDA - VAT in the Digital Age
  • EU WHT Reclaims
  • AI playground
  • Culture and Leadership
  • Diversity
  • WTS Global Academy
  • Career
  • Pillar Two Team
  • Pillar Two - Implementation Status Wordwide
  • Press
  • Events & Webinars
  • CI Guide
  • Contact
WTS worldwide
  • Albania
  • Algeria
  • Angola
  • Argentina
  • Armenia
  • Australia
  • Austria
  • Bangladesh
  • Belgium
  • Benin
  • Bolivia
  • Bosnia & Herzegovina
  • Botswana
  • Brazil
  • Bulgaria
  • Burkina Faso
  • Burundi
  • Cambodia
  • Cameroon
  • Canada
  • Cape Verde
  • Central African Republic
  • Chad
  • Chile
  • China
  • Colombia
  • Congo Brazzaville
  • Costa Rica
  • Croatia
  • Cyprus
  • Czech Republic
  • Democratic Republic of Congo
  • Denmark
  • Dominican Republic
  • Ecuador
  • Egypt
  • El Salvador
  • Equatorial Guinea
  • Estonia
  • Eswatini
  • Ethiopia
  • Finland
  • France
  • Gabon
  • Gambia
  • Georgia
  • Germany
  • Ghana
  • Gibraltar
  • Greece
  • Guatemala
  • Guinea
  • Guinea-Bissau
  • Honduras
  • Hong Kong
  • Hungary
  • Iceland
  • India
  • Indonesia
  • Iran
  • Iraq
  • Ireland
  • Israel
  • Italy
  • Ivory Coast
  • Japan
  • Kazakhstan
  • Kenya
  • Korea
  • Kyrgyzstan
  • Laos
  • Latvia
  • Liberia
  • Libya
  • Lithuania
  • Luxembourg
  • Macao
  • Madagascar
  • Malawi
  • Malaysia
  • Mali
  • Malta
  • Mauritania
  • Mauritius
  • Mexico
  • Moldova
  • Mongolia
  • Montenegro
  • Morocco
  • Mozambique
  • Myanmar
  • Namibia
  • Nepal
  • Netherlands
  • New Zealand
  • Niger
  • Nigeria
  • North Macedonia
  • Norway
  • Pakistan
  • Panama
  • Paraguay
  • Peru
  • Philippines
  • Poland
  • Portugal
  • Puerto Rico
  • Romania
  • Rwanda
  • São Tomé and Príncipe
  • Saudi Arabia
  • Senegal
  • Serbia
  • Sierra Leone
  • Singapore
  • Slovakia
  • Slovenia
  • Somalia
  • South Africa
  • South Sudan
  • Spain
  • Sri Lanka
  • Sudan
  • Sweden
  • Switzerland
  • Taiwan
  • Tanzania
  • Thailand
  • Togo
  • Trinidad and Tobago
  • Tunisia
  • Turkey
  • Turkmenistan
  • Uganda
  • Ukraine
  • United Arab Emirates
  • United Kingdom
  • Uruguay
  • USA
  • Uzbekistan
  • Venezuela
  • Vietnam
  • Zambia
  • Zimbabwe
  • About Us
    About Us

    Here you will find more information on our organization’s structure, experts and global reach.

    Read more
    About Us Our CEO Our Supervisory Board Our Global Executive Team Quality, Process & Risk Management
    Sustainability & Tax at WTS Global
  • Services
    Services

    Learn more about our network partners and their services.

    Read more
    Customs Financial Services Global Mobility Indirect Tax International Corporate Tax
    Mergers & Acquisitions (M&A) Private Clients & Family Office Sustainability & Tax Tax Certainty & Controversy Tax Technology
    Transfer Pricing & Valuation Real Estate Digital Tax Law European Tax Law
  • Experts
    Experts

    With a representation in over 100 countries, our team offers local expertise on a global scale. Learn more about our experts.

    Read more
  • News & Knowledge
    News & Knowledge

    Welcome to WTS Global Insights. Here you will find news and updates from our worldwide network.

    Read more Newsletter Subscription
    Latest News Brochures Newsletters Surveys & Studies
  • Hot Topics
    Hot Topics

    Overview of the current "Hot Topics" in the tax industry and how we can support with individual questions.

    Read more
    Pillar Two FIT for CBAM Tax Sustainability Index ViDA - VAT in the Digital Age EU WHT Reclaims
    AI playground
  • Culture & Career
    Culture & Career
    Read more
    Culture and Leadership Diversity WTS Global Academy Career
  • Locations
  • Search

New Regulation for ICMS Tax on Interstate Transactions in Brazil

Following a recent law regulating Brazil’s State VAT on interstate transactions, new controversies remain on the horizon

Author
Gabriel Caldiron Rezende
Partner
Indirect Taxes and Customs
Brazil
View Profile

On 5 January 2022, Supplementary Law 190/2022 was published to regulate the allocation of Brazil’s State VAT (ICMS) revenue on interstate transactions to end consumers (DIFAL), but it has ended up creating new controversies over the start of the new rules’ effects.

ICMS revenue split rules

Following the Brazilian Federal Constitution’s requirements on interstate transactions to end consumers, the ICMS should be split between the state of origin and state of destination as follows: (a) to the state of origin, the ICMS is calculated with the interstate rate (4%, 7% or 12%); and (b) to the state of destination, the ICMS is calculated based on the difference between the interstate rates used in the transaction and the rate applicable to internal transactions in the state of destination (usually from 17% to 19%).

The start of the controversies

Although the ICMS is a state tax, the Brazilian Federal Constitution requires that national guidelines regarding the tax triggering event, taxpayer, and taxable base definition, among other matters, should be established by a national supplementary law. However, such a supplementary law was never enacted to regulate the DIFAL charge.

In February 2021, the Brazilian Federal Supreme Court (STF) ruled on Extraordinary Appeal 1.287.019, and decided that the lack of a supplementary law regulating the DIFAL impaired the DIFAL’s levy by the states, and so charging it was unconstitutional.

New regulation, new controversies

Therefore, to regulate the DIFAL and allow the states to charge it, Supplementary Law 190/2022 was enacted and published on 5 January 2022; and it will become effective 90 days after that publication date.

Although the charge of the DIFAL cannot be made until Supplementary Law 190/2022 becomes fully effective, controversies have arisen regarding the possibility of the DIFAL being charged before 1 January 2023. This is because the Brazilian Federal Constitution provides that no tax increase may be imposed in the same fiscal year as the law that establishes that tax increase.

Given this situation, several taxpayers have brought this issue to the courts to avoid the revenue split charge in the state of destination occurring until 2023 because, technically, its regular imposition has only happened in 2022.

The legal outcome of this new ICMS controversy on interstate transactions now remains to be seen.

Author
Gabriel Caldiron Rezende
Partner
Indirect Taxes and Customs
Brazil
View Profile
New Regulation for ICMS Tax on Interstate Transactions in Brazil
Download PDF
Articles you might be interested in

Austria's new government faces a challenging economic outlook, aiming to provide tax relief while introducing levies to boost treasury revenues. These measures could impact the financial services industry. Explore the changes in this article, prepared by our colleagues at ICON (WTS Global in Austria).

Austria: New government program is addressing tax changes for the financial services sector
Read more

News on tax developments affecting the international Financial Services industry.

WTS Global Financial Services Newsletter #2/2025 is now available
Read more

A recent article analyzes foreign pension fund taxation under EU free movement of capital rules, covering WHT on dividends and insights from both EU/EEA and third-country perspectives.

Pension Funds, Taxation and the Free Movement of Capital of the EU
Read more

Get in contact

If you have any questions about WTS Global or our global services, please get in touch.
We will respond to you as soon as possible.

Contact
About Us
  • About Us
  • Our CEO
  • Our Supervisory Board
  • Our Global Executive Team
  • Quality, Process & Risk Management
Services
  • Customs
  • Financial Services
  • Global Mobility
  • Indirect Tax
  • International Corporate Tax
  • Mergers & Acquisitions (M&A)
  • Private Clients & Family Office
  • Sustainability & Tax
  • Tax Certainty & Controversy
  • Tax Technology
  • Transfer Pricing & Valuation
Latest News
  • News & Knowledge
  • Brochures
  • Newsletters
  • Newsletter Subscription
  • Surveys & Studies
Hot Topics
  • Pillar Two
  • Digital Tax Law
  • European Tax Law
Culture & Career
Exclusive Cooperation With
© 2024 WTS Company Information Data Protection Disclaimer