On 12 January 2023, Brazil’s federal government issued, as part of its tax recovery package, Provisional Measure 1,159/2023 (PM 1,159), which requires that state VAT (ICMS) be excluded from the basis for calculating federal gross revenue tax (PIS and COFINS) input credits. The purpose of PM 1,159 is to reduce taxpayers’ credit value and, therefore, increase tax collections as from 1 May 2023.
Source: Deloitte
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