Financial institutions need not pay this tax. This contribution is paid by the company. Sales Taxes Sales taxes are payable on goods and services. IPI is a federal tax payable on the domestic manufacture of products and the import of foreign products. IPI payments for raw materials, semi-finished products and packaging materials may be used as tax credits.
Higher rates apply to nonessential products such as cigarettes, beverages and cosmetics.
ICMS is payable at all stages of sale, from the manufacturer to the final consumer. ICMS rates are the same for all goods, but vary from one state to another. Exemptions, reductions and tax incentives in respect of ICMS are granted or cancelled by means of conventions between the states. The basis for assessment of both ICMS and IPI is added value. There are, however, some exceptions, such as the case of in-state transactions involving transfers between premises belonging to the same taxpayer.