Main Brazilian taxes: find out what they are!

Knowing the main Brazilian taxes is an important part during the process of opening your business. After all, a company with fiscal problems can have many difficulties: entry of a strategic partner, receiving funds from top financial institutions or institutions and even preventing the sale or closing of the company.

That is why it is necessary to plan the best way to get to know Brazil’s tax scenario in a way that is aligned with your company’s objectives.

Therefore, Gescon has prepared a list of the main Brazilian taxes that you need to know before investing in the country! Check out the following article:

Taxation

The incidence of taxes varies according to the sector in which it operates and the size of the company. See what they are:

1 –  Revenues from the sale of products and services (IPI, ICMS, ISS, PIS / COFINS and social security contributions),

2 – Imports of goods, services and technology (Import Tax, IPI, PIS / COFINS, CIDE, ICMS and ISS),

3 – The payroll (social security contributions),

4 – Equity (ITR, IPTU and IPVA),

5 – The exercise of certain regulated activities (eg Anatel, FUST, FUNTEL fee) and, finally,

6 – Profit (IRPJ and CSL).

These taxes can also be classified according to the levels of government that collect them. To make it easier, we detail below some of the main taxes on companies in the country:

Main federal taxes

IRPJ (Corporate Income Tax): levies on the company’s profit, with a rate of 15%, plus an additional 10% on the portion of the profit that exceeds the stipulated monthly amount. IRPJ is withheld by customers when paying invoices.

CSLL (Social Contribution on Net Income): levies on the real profit of the business, with a rate of 9%.

COFINS (Contribution for Social Security Financing) and PIS (Social Integration Program) / PASEP (Civil Servants’ Property Formation Program): these are contributions that affect the company’s gross revenue, in general, with a combined rate of 3, 65% (3% COFINS and 0.65% PIS / PASEP). Like IRPJ, PIS / COFINS is also retained by customers when paying invoices.

IPI (Tax on Industrialized Products): it is a tax on industrialized products, which are taxed when they leave the factory. The rates vary widely by product and, on average, are between 10% and 12%.

Main state tax

ICMS (Tax on Circulation of Goods and Services): it is similar to the IPI, but it can also apply to some services. It varies greatly by type of product or service.

Main municipal tax

ISS (Tax on Services of Any Nature): levies on the provision of services listed in Complementary Law No. 116/03. The average rate varies between 2% and 5%. According to Eduardo Borges, “some municipalities charge ISS on a cash basis (as revenue is received); others, on an accrual basis (as the billing takes place).

In most cases, the ISS is due to the municipality in which the provider establishment is actually located. However, in relation to certain types of service, the ISS will be due to the municipality in which it is provided, such as construction, cleaning, sweeping, etc.

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