Understanding ICMS Substitution

In Brazil, ICMS Substitution is ICMS tax that is charged on interstate transactions, or on special products and clients. Although this tax appears to be the same as ICMS, it is applied differently.

The rates are the same rates that the system uses for ICMS calculation. A markup is applied to the price of the supplier to forecast the price that will be charged in the next transaction.

You enter ICMS substitution rates on the same forms as you enter ICMS tax rates.