Changes on Brazilian Standard ICMS States for 2024

The Vertex Certified Implementer Program sets the standard for Vertex tax technology product knowledge and provides organizations with an effective way to develop and recognize Vertex implementation professionals.

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 (State-Level VAT). 

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 optimize collection. 

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. For more insights on Brazil's monumental Tax Reform and its key takeaways, a good start would be my previous blog on this topic. 

Blog Author

Industry Influencer Ana Maciel

Ana Maciel

Senior Manager, Tax Research

See All Resources by Ana

Ana Maciel is a senior tax research manager responsible for new tax content that supports the Vertex Indirect Tax O Series solution in Brazil. Based in São Paulo, she has more than 24 years of experience in Brazilian indirect tax and has worked at Vertex for over 11 years. Previously, she worked as a tax advisor to multinational companies in Big 4 accounting firms. Ana holds a B.S. in law and a B.S. in business administration, as well as a post-graduate degree in international trade from Universidade Paulista.

View Newsletter Signup

Drivers of Tax Transformation

This Tax Transformation podcast series, featuring guest analysts from IDC, reviews the tax drivers and trends for tax transformation and change management from both a European and global perspective.

Vertex Tax Implementation Services