The Brazilian taxation influence on a company's transportation cost

A case study was applied on a multinational company located in Brazil, in the metallurgical industry, which outsources the delivery of its products to customers through a transportation company. The purpose of this paper was to minimize products' distribution costs to this company, observing the different tax structures of the ICMS (Tax on Circulation of Goods and Services), due to the fact state benefits of ICMS could decrease the total cost. Study results suggest that using some DCs may help decrease total distribution cost because of tax impact. It also suggests that the distribution of imported products may be cheaper than the national one, without considering its purchase and manufacturing costs. The proposed approach contributes, to Brazilian companiesor multinationals, to evaluate tax incentives as an alternative to reduce logistical costs, relevant given the current context of Brazilian transport.