• Maximising the Value of Indirect Tax Credits
  • December 4, 2013 | Authors: Ricardo Ciconelo; Lucas Kurtz; Joaquim Manhães Moreira
  • Law Firm: Manhães Moreira e Ciconelo Sociedade De Advogados - São Paulo Office
  • When manufacturers acquire inputs (eg, raw materials or components), indirect tax is incurred. This indirect tax is equivalent to the tax initially paid by the supplier subsequently passed on to the manufacturer through the cost of the input. The manufacturer receives a tax credit for the indirect tax incurred during the acquisition of inputs. The indirect tax credits can later be used to offset taxes levied on the sale of the manufactured goods (ie, tax liabilities or tax debits).