Brazil: No ICMS Tax on Back-to-Back Trades

Back-to-Back trades describe the buying and selling of goods without them touching Brazilian soil. Specifically, Brazilian companies buy goods from a foreign vendor and let them be shipped to a buyer abroad by a third party (supplier).

Since no import or export of the goods to/from Brazil takes place, which taxes apply to the scenario in Brazil?

Since the import or export of goods is the tax base for ICMS, this tax is not levied in this instance. The state of São Paulo had affirmed this notion in his response to the tax consultation 16045/2017. The same line of argumentation is true for import taxes. Consequently, no PIS/COFINS or IPI import taxes are levied on Back-to-Back trades.


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