Source: Sebrae SC - NEWS FOR SMEs - 15/07/2010

The Santa Catarina government took to the scope of Confaz, a council that decides on ICMS collection rules in the country, the complaint of state businessmen about losses caused by tax substitution in companies linked to Simples Nacional. Replacement is the model that collects the tax from the supplier of the products, to avoid evasion.

As the director of Tax Administration of the Secretariat of Finance, Edson Fernandes Santos, the suggestion from Santa Catarina was accepted by other states, and the next step will be an extraordinary meeting of Confaz, in a virtual environment, this month, to forward a decision. The proposal is to reduce the Value Added Margin (MVA) by up to 50%, which balances the tax on purchases outside the state.

Losses in Simple

Companies opting for Simples Nacional lose because their revenues are subject to ICMS rates of 1,25% to 3,95%, depending on the revenue range.

If their sector falls in tax substitution, with advance payment of the tax, the rate rises to 12% or 17%, depending on each segment.

* The texts presented here are extracted from the sources cited in each article, with the sources presented credit for them.