The Value Added Margin (MVA) is an essential component in the tax management of companies, especially with regard to ICMS (Tax on the Circulation of Goods and Services) .
The MVA is used by the State Finance Departments to define the calculation basis for ICMS in advance on transactions involving goods subject to tax substitution.
Each state has its own MVA NCM table, specifying the percentages applicable to different products according to the Common Nomenclature of Mercosur (NCM) .
That’s why we’ve written this article to tell you everything about what the Value Added Margin is, the importance of the MVA Table, and how these elements can impact the financial health of your business. Keep reading!
Index
The Concept of MVA and the National VAT Table
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Importance of the MVA Table for Restaurants
Tax Substitution and the MVA Table
Adjusted MVA: Calculation and Importance
Conclusion
The Concept of MVA and the National VAT Table
Recently, the transition from 2022 to 2023 brought discussions about the implementation of a national VAT Table, which aims to unify taxes across the country.
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The term VAT (Value Added Index) has been used to replace MVA, although both have the same function in practice: to control taxes in a more efficient and simplified way.
The unification proposed in the tax reform seeks to reduce bureaucracy in the Brazilian tax system, facilitating investment and combating tax evasion.
Importance of the MVA Table for Restaurants
To correctly manage taxes, especially in the restaurant sector, it is albania phone number data essential to know the NCM codes and the respective taxes.
The states' MVA table can be consulted on the Confaz (National Council for Tax Policy) portal , an agency linked to the Ministry of Economy .
Tax Substitution and the MVA Table
The MVA is used for tax substitution, a regime that concentrates the collection of ICMS at a single point in the consumption chain. There are three types of tax substitution:
1. Forward Tax Substitution: the manufacturer or importer pays the ICMS for the entire consumption chain.
2. Concomitant Tax Substitution: the agent who did not provide the service in the sales chain collects the ICMS.
3. Backward Tax Substitution: the last taxpayer in the chain is responsible for paying the taxes in full.
Forward tax substitution is the most common and impactful for restaurants, as ICMS is included in the price of the product, affecting the final cost to the consumer.
Adjusted MVA: Calculation and Importance
Adjusted MVA is used to balance tax collection in interstate transactions, especially when the tax rate of the receiving state is higher than that of the originating state. Adjusted MVA is calculated as follows:
These are its parameters:
Original MVA ST: is the Value Added Margin valid for internal operations in tax substitution
ALQ inter: corresponds to the interstate tax rate that applies to the transaction
ALQ intra : corresponds to the internal rate or percentage of effective tax burden in the State of destination of the goods.
For example, with an original MVA-ST of 30%, an interstate tax rate of 10% and an internal tax rate of 15%, the adjusted MVA would be: