Tax Planning in Pharmaceutical Distributors Through the Use of ICMS Tax Benefit

Amanda Teresinha Meloni; Carolina Silva Campos

DOI: 10.22167/2675-6528-202602636

Article derived from a Course Conclusion Work (TCC), with content based on the student’s original work and adapted to the editorial format of the E&S Magazine with the support of the ResumeAI tool, an artificial intelligence solution developed by Instituto Pecege for textual synthesis and organization.

Summary

Tax planning in pharmaceutical distributors, a sector with selling prices regulated by CMED, is an essential tool for competitiveness and tax burden reduction. The study aimed to characterize the use of the ICMS granted credit tax benefit as a tax planning strategy in a pharmaceutical distributor located in Goiás, evaluating its relevance for the sector’s competitiveness against price regulation. To this end, a case study was conducted in a wholesale pharmaceutical distributor, analyzing billing and ICMS calculation data from its branches in Goiás, São Paulo, and Rio de Janeiro, in the period from January to June 2025. The results showed that the application of the granted credit in Goiás provided a reduction in the ICMS tax burden for the distributor, totaling R$ 2,961,839.82 over the six months analyzed. It was concluded that the tax benefit was crucial for the company’s tax savings. Additionally, the transition of the Tax Reform and the progressive termination of state tax benefits were addressed, indicating the need to adapt tax planning strategies for the future.

Keywords: Tax benefit; Tax burden; Granted credit; ICMS.

1. Introduction

The Brazilian business scenario presents growing complexity and challenges, demanding effective strategies from organizations to maintain financial health and growth. In this context, tax planning emerges as an essential tool to align companies’ internal objectives with fiscal requirements, seeking to optimize the tax burden (Machado, 2024).

In the pharmaceutical distribution sector, which acts as an intermediary between the pharmaceutical industry and retail, market dynamics are particularly restrictive. Selling prices are regulated by the Chamber of Regulation of the Drug Market (CMED), which establishes maximum prices such as the Maximum Consumer Price (PMC), the Maximum Government Sale Price (PMVG), and the Factory Price (PF), according to guidelines from the National Health Surveillance Agency.

This price regulation limits the maneuverability of distributors to compete solely through price adjustments. Consequently, tax savings become a crucial competitive differentiator for the sustainability of these companies in the market. Tax planning, in this sense, consists of the study and programming of acts and business that aim for lawful fiscal savings, avoiding penalties and ensuring compliance (Germano, 2013).

One of the most relevant and complex taxes in Brazil is the Tax on Circulation of Goods and Services of Interstate and Intermunicipal Transport and Communication (ICMS). Characterized by its high individual collection and the complexity of its legislation, ICMS is frequently the subject of disputes between states, a phenomenon known as tax war. This dynamic leads to the granting of tax benefits as a strategy to attract investments and promote regional development (Rocha, 2020; Campos et al., 2017).

In this scenario, the use of tax benefits and incentives, such as granted credit, represents a legitimate form of tax planning for the reduction of burdens (Carota, 2024). The granting of such benefits, often in the form of revenue waivers, is a strategy adopted by states like Goiás to foster economic and regional development. However, the effectiveness and relevance of these mechanisms for the competitiveness of pharmaceutical distributors, especially in light of price regulation, demand in-depth analysis.

The relevance of this study is amplified by discussions surrounding the Tax Reform, which foresees the gradual elimination of ICMS tax benefits, directly impacting current tax planning strategies. Given this context, the present work aimed to characterize the use of the ICMS granted credit tax benefit as a tax planning tool in a pharmaceutical distributor in the state of Goiás, identifying its relevance for the sector’s competitiveness in light of CMED price regulation, comparing it with branches located in other states that do not have such an incentive, and briefly addressing how the Tax Reform foresees the gradual elimination of ICMS tax benefits.

2. Material and Methods

The research was designed as a case study, of a qualitative nature, with the purpose of characterizing the use of the tax benefit of the granted credit of the Tax on Circulation of Goods and Provision of Interstate and Intermunicipal Transport and Communication Services (ICMS) in a pharmaceutical distributor. The qualitative approach allowed for an in-depth analysis of the organization’s contextual and fiscal data (Creswell, 2021).

The empirical object of the study consisted of a wholesale distributor of medicines, with branches located in the states of Goiás, São Paulo, and Rio de Janeiro. The main unit of analysis was the Goiás branch, specifically the distribution center located in the city of Itumbiara, where the tax benefit of granted credit is applied.

Data collection occurred from January to June 2025. Documentary and bibliographic research was carried out, with access to primary data provided by the company’s management. The collection instruments included documents and reports generated by the distributor’s integrated system, covering billing information, ICMS calculation statements, and the tax burden of ICMS on sales.

The criteria for selecting the analyzed branches were based on the availability of fiscal data necessary for the study and the possibility of comparing distinct tax treatments. The Goiás branch was selected for using granted credit as a tax planning strategy, while the São Paulo and Rio de Janeiro branches did not have such an incentive, allowing for a relevant comparison.

The ICMS credit granted, the focus of the analysis, consists of the application of a 4% rate on the interstate sale of human medicines. This benefit is recorded in the ICMS calculation as “Other Credits” and requires the execution of a Special Regime Agreement (TARE) with the State of Goiás, according to articles 10 and 11, item XXIII of Annex IX of the Regulation of the Tax Code of the State of Goiás Decree No. 4,852, of December 29, 1997.

The collected data were organized into tables, initially by branch and period, to facilitate visualization and comparison. This organization allowed us to observe the percentage of representativeness of each branch in the distributor’s total sales and compare the ICMS values calculated in each distribution center/State.

The data analysis technique employed was the comparative analysis of the ICMS tax burden among the branches in the three states. For the Goiás branch, an analysis was performed in two distinct scenarios: the calculation of ICMS without the application of the granted credit and the calculation with the effects of this tax benefit. This procedure aimed to demonstrate the difference in the amount of ICMS to be paid in each scenario.

Additionally, the study contextually addressed the predictions of the Tax Reform regarding the gradual elimination of ICMS tax benefits. This approach was based on bibliographic and documentary information about the legislation and expected impacts, without involving primary data collection or specific empirical analysis of the reform.

The analysis sought to demonstrate the difference in Sales and Services Tax (ICMS) in the two scenarios for the Goiás branch and the effect on the distributor’s tax burden, considering the impact of granted credit as a planning and competitiveness tool in the face of sector price regulation. Empirical findings, percentages, or interpretations of the results were not included in this section.

3. Results and Discussion

The analysis of the pharmaceutical distributor’s data revealed the centrality of tax planning, especially regarding the use of the tax benefit of granted ICMS credit in the state of Goiás. The findings demonstrate how this strategy directly impacts the company’s tax burden and, consequently, its ability to maintain competitiveness in a sector with prices regulated by CMED. The comparative study between branches in different states allowed for the quantification of the relevance of this mechanism, highlighting the effectiveness of strategic location for tax optimization, as pointed out by Rocha (2020) regarding tax wars and the pursuit of benefits.

During the period from January to June 2025, the total revenue of the distributor across the three analyzed branches (Goiás, São Paulo, and Rio de Janeiro) reached R$ 228,033,275.99. The Goiás branch showed the highest representativeness in this total, contributing 42% of the revenue, followed by the São Paulo branch with 41%, and the Rio de Janeiro branch with 17%. This initial distribution already suggests the importance of the Goiás operation for the company’s business volume, making the analysis of the tax burden in this state particularly relevant for the distributor’s financial health.

When considering the ICMS debt without the application of the granted credit benefit, the Goiás branch registered a total debt of R$ 13,891,885.71 in the analyzed period. In this scenario, the representativeness of the Goiás branch’s ICMS debt in relation to the total debt of the three branches was 42%. The São Paulo branch, in turn, represented 43% of the total debt, while the Rio de Janeiro branch contributed 15%. These data establish a baseline for understanding the impact of the tax benefit, showing the original proportion of the ICMS tax burden that the Goiás branch would bear without the incentive.

The application of the ICMS granted credit benefit in the Goiás branch showed a significant reduction in the debt amount. The granted credit, awarded on interstate sales operations of medicines with a 4% rate, totaled R$ 2,961,839.82 over six months. As a result, the net ICMS debt for the Goiás branch was R$ 10,930,045.89. For example, in March, the ICMS debt, which was initially R$ 3,350,942.28 without the benefit, was reduced to R$ 2,735,704.75 after applying the granted credit, illustrating the effectiveness of the tax incentive in reducing charges.

With the use of granted credit, the representativeness of the ICMS debit of the Goiás branch in relation to the total debit of the three branches decreased from 42% to 37%. This percentage reduction, although it seems modest in the overall context, is crucial for the distributor’s competitiveness, especially considering the price regulation imposed by CMED. The ability to reduce the ICMS tax burden by R$ 2,961,839.82 in just six months reinforces the importance of tax planning as a competitive differential, as highlighted by Machado (2024) and Carota (2024) on the pursuit of lawful fiscal savings.

The reduction of the ICMS tax burden in Goiás, driven by granted credit, was 21.32% compared to the debt without the benefit’s utilization. The average tax burden, which would have been 18.64% without the benefit, was effectively reduced to 11.42% with its application. This difference of 7.22% in the average tax burden demonstrates the direct and positive impact of the tax benefit on the distributor’s profit margin. In contrast, the branches in Rio de Janeiro and São Paulo, which do not have such an incentive, maintained their tax burdens without this optimization, underscoring the strategic advantage of the Goiás branch.

The analysis of the ICMS debit balance for the Goiás branch, with and without the granted credit benefit, revealed a significant transformation in the company’s fiscal situation. In January 2025, for example, the ICMS debit balance, which would have been R$ 518,517.00 without the benefit, was reduced to R$ 34,541.00 with the application of the granted credit. Most notably, in February, May, and June, the use of the benefit resulted in credit balances, which could be used in future accounting periods, providing greater financial flexibility and cash flow management for the distributor.

The granting of tax benefits by the State of Goiás, such as the ICMS granted credit, is a tax waiver strategy to attract investments and foster regional development. Data from the 2024 Tax Waiver Report indicate that the state’s total tax waiver reached R$ 17.70 billion in 2024, with ICMS accounting for 94% of this amount, or R$ 16.6 billion. This state policy corroborates the view of Campos et al. (2017) on the “tax war” between states, where the granting of incentives becomes an attraction for companies, such as the studied distributor, which seek to optimize their tax burden.

The distribution of ICMS waiver by economic activity in Goiás, in 2024, showed that wholesale trade, a sector in which the pharmaceutical distributor operates, ranked second, representing 21% of the total, behind only industry, with 69%. Furthermore, the municipality of Itumbiara, where the Goiás branch is located, ranks as the ninth municipality with the highest ICMS waiver through granted credit, totaling R$ 0.19 billion. These data reinforce the intentionality of Goiás’s fiscal policy in benefiting specific sectors and regions, aligning with the distributor’s strategy to establish itself in locations with tax incentives.

The Tax Reform, regulated by Complementary Law 214/2025, foresees substantial changes that will impact the tax planning of pharmaceutical distributors. One of the central objectives is the reduction of distortions generated by the “tax war” between states, with the gradual replacement of ICMS by the Tax on Goods and Services (IBS) by 2033. This transition will imply taxation at the destination, and no longer at the origin, which will eliminate current state tax incentives, requiring a complete reassessment of tax optimization strategies (Rezende, 2021).

To mitigate the impacts of the termination of tax benefits, Complementary Law 214/2025 establishes compensation mechanisms. Individuals and legal entities with onerous ICMS tax benefits will be compensated with resources from the Tax Benefit or Financial-Tax Benefit Compensation Fund, with a transition schedule from January 2029 to December 2032. Additionally, Constitutional Amendment No. 132, of 2023, created the National Regional Development Fund, which will start with R$ 8 billion in 2029 and reach R$ 40 billion annually from 2033, aiming to reduce regional inequalities.

Faced with these changes, the drug distributor will need to adapt its tax planning, which is currently heavily based on ICMS tax benefits. Complementary Law 214/2025, in its article 128, item V, and articles 133 and 134, provides for a 60% reduction in IBS and CBS rates for some medications, provided they comply with the CMED system or that the industry/importer enters into a commitment with the Union and the IBS Management Committee. This will require rigorous control of medication classification and compliance with requirements to ensure eligibility for benefits, making tax planning even more complex and multidisciplinary, involving fiscal, accounting, financial, and legal departments.

In summary, the research demonstrated that the tax benefit of the ICMS granted credit in Goiás was a highly effective tax planning tool for the pharmaceutical distributor, resulting in tax savings of R$ 2,961,839.82 in the analyzed period and contributing significantly to its competitiveness in a market with regulated prices. However, the imminent Tax Reform imposes the need for a restructuring of tax planning strategies, requiring the company to adapt to a new fiscal scenario, where the pursuit of tax efficiency will be achieved through new approaches and a more in-depth control of operations and specific legislation for the sector.

4. Conclusion

This study aimed to characterize the use of the tax benefit of ICMS granted credit as a tax planning tool in a pharmaceutical distributor located in Goiás, evaluating its relevance for competitiveness in a sector with prices regulated by CMED. It was found that the application of the granted credit provided a significant reduction in the ICMS tax burden for the distributor, totaling R$ 2,961,839.82 in the period from January to June 2025. This fiscal saving was crucial, decreasing the average tax burden from 18.64% to 11.42% in the Goiás branch, which demonstrated a direct impact on the company’s profit margin and competitive capacity. The comparison with branches in São Paulo and Rio de Janeiro, which do not enjoy similar benefits, highlighted the strategic advantage of the location in Goiás, where the tax waiver policy is a mechanism for attracting investments and regional development.

The main contribution of this work lies in the empirical demonstration of the effectiveness of tax planning, through granted credit, as a tangible competitive advantage for pharmaceutical distributors in a regulated pricing environment. However, the Brazilian fiscal scenario presents an imminent transformation with the Tax Reform, which foresees the gradual elimination of state ICMS tax benefits by 2033. This transition imposes on distributors the need to re-evaluate and adapt their tax planning strategies, seeking new approaches for tax optimization and more rigorous control of operations and sector-specific legislation. For future studies, it is suggested to analyze the new tax planning strategies that will emerge with the implementation of the Goods and Services Tax (IBS) and to evaluate the impact of the fiscal transition on the competitiveness of companies in the pharmaceutical distribution sector.

Bibliographic References

Campos, C.A.A; Ibrahim, F.Z; Oliveira, G.G.V. 2017. Estudos de Federalismo e Guerra Fiscal, volume 1, 1ed. Gramma, Rio de Janeiro, RJ, Brasil

Carota, J.C. 2023. Planejamento Tributário e Incentivos Fiscais Empresariais. 2ed. Juruá, Curitiba, PR, Brasil.

Creswell, J.W; Creswell, J.D. 2021.Projeto de Pesquisa: Métodos, qualitativo, quantitativo e misto, 5ed. Penso, Porto Alegre, RS, Brasil.

Germano, L.C. 2013. Planejamento tributário e limites para a desconsideração dos negócios jurídicos. 1ed. Saraiva, São Paulo, SP, Brasil.

Machado, H.B.,2024. Introdução ao planejamento tributário. 3ed. Jus Podivm, São Paulo, SP, Brasil.

Oliveira Rezende, R.2020. Benefícios e Competição Fiscal entre Estados Brasileiros: Judicialização da “Guerra Fiscal” do ICMS no Supremo Tribunal Federal (Menção Honrosa Prêmio do Tesouro /2019). Revista Caderno de Finanças Públicas, Brasília, v.01, p1-80, Edição Especial 2020. Disponível em: < https://publicacoes.tesouro.gov.br/index.php/cadernos/article/view/79> Acesso em:28 mar.2026

Rocha, J. 2020. Planejamento Tributário. Senac, São Paulo, SP, Brasil.

Article originating from the Course Conclusion Work of the Specialization in Tax Management of the MBA USP/Esalq

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