Brazil: ICMS amount deducted to PIS/COFINS base
Brazil has a new requirement on the exclusion of ICMS (state sales tax) from the PIS/COFINS (federal contribution on total revenue) tax base. From a certain date, a company can decide to exclude ICMS value from the calculation of PIS/COFINS base. Deduction of ICMS from PIS/COFINS base should be according to the following decisions:
Sales:
Customer Sales
- Exit invoice issued - according to Company decision
Customer Returns
- Entry invoice issued by customer - according to customer
- Original Exit invoice used - according to the original invoice
Supplier Returns
- Exit invoice issued - according to supplier rule.
Purchases:
Supplier Invoice
- Entry invoice - according to supplier rule.
This applies to Domestic invoices only.