# What is ICMS?

Country: Brazil

ICMS is the state tax on the circulation of goods and on interstate transport and communication services. Each state sets its own internal rates, dates and rules.

## Current rate (Monthly, on each state's calendar.)

Internal rates vary by state. Interstate sales: 12% or 7% depending on the destination, 4% for imported goods.

## Example

A company in one state selling goods to a business in another state charges the interstate rate set for that destination, not its own state's internal rate.

## How ICMS works in Brazil

ICMS is reported through state systems and the company needs a state registration (Inscrição Estadual). Simples Nacional companies pay ICMS inside the DAS, and an MEI pays a fixed R$1 a month. Under the reform, ICMS is reduced from 2029 and extinguished in 2033. AccountsOS does not file ICMS returns.

Source: https://www.gov.br/receitafederal/pt-br/acesso-a-informacao/acoes-e-programas/programas-e-atividades/reforma-consumo/entenda

## Related terms

- [ISS (ISSQN)](https://accounts-os.com/br/glossary/iss-brazil)
- [CBS and IBS](https://accounts-os.com/br/glossary/cbs-ibs-brazil)
- [NF-e and NFS-e](https://accounts-os.com/br/glossary/nf-e-brazil)