ICMS (VAT) on the energy bill (Brazil)

ICMS (VAT) on the energy bill (Brazil)

After all, should ICMS be charged on the demand portion?

For decades, this issue has been brought before Brazilian courts.

The technical understanding was that ICMS should only be charged on the portion of energy, as this is what “circulates”.

Along the same lines, ICMS should not be charged on the demand portion as it has to do with infrastructure and not energy.

Now apparently the understanding will be through charging ICMS on demand and energy.

Technically the decision would be dubious. It practically favours the State and its greed for more tax revenues.