Although the term ICMS is widely used, not everyone knows what the acronym actually means. The acronym means Tax on Circulation of Goods and Services, and its value varies according to each Brazilian state.
So we know it's a tax. But about what? The tribute covers the circulation of various products, from electronics to food. In addition to other services, such as transport, communication and several others. In addition, products imported from abroad are also subject to the tax.
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Value is regressive, so the more you produce, the less you pay. On the other hand, the less produced, the more the tax will be paid.
ICMS is levied on various goods and services, and its value is passed on to the states. And the rulers, in turn, must apply the tax in the areas of the state that most need it, such as health and education.
What are the taxpayers
The answer to this question is simple: us! Every individual or legal entity that does business with income generation must contribute with the tax. This is because for commercial activities to work within the law, it is necessary to register and pay ICMS.
As for the registration, it is done by the State Department of Finance. When paying the tax, most states use an average percentage of 17% on the value of the product or service provided.
Therefore, the ICMS value is passed on to the consumer, as it is included in the final price of the products.
Goods not taxed by ICMS
Although most products and services are taxed, some sectors are not charged at all. Like for example the trade of newspapers and books. Likewise, businesses related to oil, gold, agriculture, electricity, commercial transfers and some others are not taxed.
In addition, cars adapted for people with special needs and merchandise operations for sales in the foreign market are also exempt from ICMS.
