Understand How It Works and Its Benefits
* By Carlos Bonan
The deferral of ICMS (Tax on the Circulation of Goods and Services) is a regime that allows the postponement of payment of the tax levied on transactions involving the circulation of goods.
In this case, instead of collecting ICMS when products enter, companies can postpone payment until the products leave, especially in sectors that deal with narrower profit margins.
The ICMS/SP regulation provides, starting from article 345, for operations involving certain products that allow for postponement until the time the products leave, favoring agribusiness and some other activities.
One of the operations in which the State suspends the payment of tax and defers it until the final departure of the finished product is in the form of Industrialization by Order, provided for in articles 402 et seq.
“Article 402 of RICMS/SP – The levy of tax on the departure of goods destined for another establishment or for a self-employed or casual worker who provides personal services, in both cases, for industrialization, in accordance with the provisions of articles 409 and 410, is suspended and must be carried out at the time when, after the return of the industrialized products to the establishment of origin, author of the order, the subsequent departure of the same products is promoted by this establishment.”
Articles 409 and 410 regulate the deadline for completing industrialization processes within 180 days, with provision for extensions.
Benefits of Deferred ICMS:
Incentive to Industrialization: It facilitates the acquisition of inputs, promoting the development of new products.
Tax Planning: Helps in the analysis and optimization of tax costs.
Improved Cash Flow: It allows companies to use resources that would otherwise be allocated to taxes for other investments.
Competitiveness: Reduces the impact of tax, enabling more competitive prices.
It is essential that companies are aware of the rules of São Paulo legislation and seek professional guidance to ensure that they take advantage of this opportunity correctly.
Given the permanent need to reduce fixed and variable costs, seeking to legally reduce tax costs and defer tax payments, while maintaining cash, are actions that can make an important difference to the company's financial health.
*Carlos Bonan is a tax specialist at ASPR
Notice: The opinion presented in this article is the responsibility of its author and not of ABES - Brazilian Association of Software Companies
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