Understanding ICMS Substitution Calculation for SIMPLES Tax Payers (Release 9.2 Update)

The ICMS substitution tax is a simplified tax regime applicable to micro and small companies categorized as SIMPLES tax payers.

ICMS Substitution Tax Calculation

For instance, in an intrastate transaction in São Paulo (SP), when the supplier is a tax payer classified as 1, and the ICMS Substitution value is Z (yes, use net price) and the ICMS Code is 2 (exempt or not taxable), the calculation of the ICMS substitute will be based on:

• Base amount or substitute base amount
• ICMS Substitution Mark-Up Rate = 63.10%
• ICMS State Tax = 18%

Calculations

• ICMS Substitution = substitute base amount + (substitute base amount * 63.10%)
• ICMS Tax = substitute base amount * 18%
• ICMS Substitute = (ICMS substitution * 18%) - ICMS tax value

Example

• Basis amount = 8712
• Substitute basis = 8712.00
• ICMS Substitution = 8712.00 +(8712.00 * 63.10%) = 14209.272
• ICMS tax = 8712 *18% = 1568.16
• ICMS Substitute = 14209.272 * 18% = 2557.66896
  • 2557.66896 - 1568.16 = 989.50896