The federal government proposed, in the regulation of tax reform, that all international purchases are taxed under the new Value Added Tax (VAT). As a result, the current “exemption” for goods under US$50 may cease to exist when the transition process ends.
Commenting on the matter, the secretary of tax reform at the Ministry of Finance, Bernard Appy, said that even low-value items will suffer state and federal charges after the implementation of the consumption reform.
As a result, when the reform comes into operation, international purchases will have to pay the two new taxes that make up VAT: the IBS (Tax on Goods and Services), from states and municipalities, and the CBS (Contribution on Goods and Services) , which is federal.
Appy said that the new rules do not change the import tax, as this tax is not covered by the reform, and it remains zero for purchases of up to US$50 under the current regime. However, the secretary predicts that pressure from retail and industry should change the scenario even before the reform comes into force.
Furthermore, he acknowledged that the measure could result in increased charges on these purchases.
The difference compared to what it is today is small. It will be a very similar charge – he told Folha.
Currently, all international purchases pay ICMS and those exceeding US$50 are charged an extra 60% federal tax. In the new taxation system, everything must be simplified within VAT, and the consumer will continue to pay taxes at the time of purchase.
Appy recalled that states are considering increasing the ICMS to 25% and this is more than what the government intends to tax in the new regime.
Depending on what states do, we could even see a reduction in federal taxes.
The transition to Value Added Tax (VAT) begins in 2026 and should be completed in 2033. During this period, Brazil must live with two tax systems until the current one is completely replaced.
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