What is ICMS?

ICMS is the acronym that represents the tax over operations relating to the circulation of goods and installments of interstate, intermunicipal, and communication transport services. It is a tax that each state and federal district can establish to determine the federal constitution of 1988. To act in an activity branch attained by the tax, the person, physically or legally, should register on the ICMS taxpayer registration. They should also pay the tax of unregistered individuals when they import goods from other countries, even without a regular course of dealing or commercial intentions. This tax may be selective.

In most cases the ICMS, which is built-in to the price, corresponds to percentage of 18%. However, for certain basic foods, such as rice and beans, the ICMS charge is 7%. Whereas, in cases of unnecessary products, for example, cigarettes, cosmetics and perfumes the charge is 25%. The ICMS is a non cumulative tax, compensating for the worth given to each operation or installment along with the sum previously charged.

In each stage of the circulation of goods and in each service installment subject to the ICMS a sales invoice should be given out. These documents will be recorded in the account ledger so that the tax may be calculated by the taxpayer and collected by the state. The ICMS is the greatest font of financial resources for the state of Sao Paulo. It is important that citizens always demand the sales invoice and always pay close attention to protect the proper use of public resources, so that the government may adequately meet the needs of the population.