ICMS adjustments began in 2024 and will coexist with CBS and IBS during pilot years starting in 2026. Plan for parallel processing while legacy and new regimes operate together.
Changes on Brazilian Standard ICMS States for 2024
Brazil tax changes: 2024 ICMS updates by state
ICMS tax Brazil: what pricing teams should review
Confirm how ICMS changes interact with your Brazil tax system settings, including jurisdiction assignment and invoice fields.
The final text of the Brazilian Tax Reform, possibly to be enacted this week, has prompted certain Brazilian states to adjust their internal standard rates due to concerns about a potential impact on their autonomy in regulating and collecting ICMS, highlighting how ICMS Brazil tax is evolving as part of wider reforms.
After the successful implementation of the Tax Reform, the ICMS (currently under state-level jurisdiction) will be collected centrally and then distributed to the Federation Units. This will follow a new specific method introduced by the government, which considers each state's share based on the average collection from 2024 to 2028.
Therefore, this restructuring has a direct impact on ICMS rates as states are encouraged to increase their rates to optimise collection, so Brazil ICMS tax rates must be monitored closely by pricing and tax teams.
So far, of the 27 Brazilian States, 10 States and the Federal District have made the changes official. However, there are others, such as Rio de Janeiro and Rio Grande do Sul, still in the voting process:
| State | Current Rate | New Rate | Initial Effects |
|---|---|---|---|
| Pernambuco | 18% | 20.5% | JAN/01/24 |
| Ceará | 18% | 20% | JAN/01/24 |
| Paraná | 19% | 19.5% | MAR/13/24 |
| Paraíba | 18% | 20% | JAN/01/24 |
| Rio Grando do Norte | 20% | 18% | JAN/01/24 |
| Rondonia | 17.5% | 19.5% | JAN/12/24 |
| Distrito Federal | 18% | 20% | JAN/21/24 |
| Bahia | 19% | 20.5% | FEB/07/24 |
| Maranhão | 20% | 22.0% | FEB/19/24 |
| Espirito Santo | 17% | 19.5% | APR/01/24 |
| Goiás | 17% | 19.0% | APR/01/24 |
These changes will have immediate repercussions on final prices, as they will influence the Manufacturing Price (PF) and the Maximum Price to the Consumer (PMC) of various products, which can affect how businesses perceive the overall tax rate in Brazil on affected goods. For more insights on Brazil's monumental Tax Reform and its key takeaways, a good start would be my previous blog on this topic.
Disclaimer
Please remember that the Vertex blog provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information. The views and opinions expressed in the Vertex blog are those of the authors and do not necessarily reflect the official policy, position, or opinion of Vertex Inc.
FAQs
Several states updated rates in 2024 as listed in this article. Confirm current ICMS Brazil tax rates with official state sources before applying changes.
ICMS rate shifts can influence PF and PMC and may affect credits and final prices within value added tax in Brazil. Review price files and credit rules.
Prioritise state rate tables, CST codes, MVA settings and item classification. Validate invoice outputs to ensure bases and rates reflect new ICMS values.
Changes can occur during state budget cycles or policy shifts. Monitor official state finance secretariats and CONFAZ publications and reconcile against internal rate tables.
Higher ICMS rates may increase PF and PMC for affected products. Coordinate pricing, tax and sales teams to update lists and communicate changes.
Consult state Secretaria da Fazenda websites and CONFAZ agreements for official ICMS rules and rate changes and align documentation accordingly.
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