Hello! Welcome to ORGATEC’s channel. Today, we will provide an overview of the complex Brazilian tax system. Understanding the main taxes, fees, and contributions is crucial to ensure compliance and optimize your company’s tax obligations in Brazil .
Federal Taxes:
- The Corporate Income Tax (IRPJ) is applied to company profits, with a standard rate of 15%, plus an additional 10% on annual profits exceeding R$240,000. IRPJ and CSLL tax rates can vary according to business activity.
- The Social Contribution on Net Profit (CSLL) is a supplementary tax on corporate profits, with a standard rate of 9%, which can also vary.
- The Excise Tax (IPI) is levied on manufactured goods, including imports.
- PIS (Social Integration Program) and COFINS (Contribution for the Financing of Social Security) are social contributions levied on company revenue. The common rate for PIS is 0.65% or 1.65% and for COFINS is 3% or 7.6%. There are special rates for specific products and activities.
- The Import Duty is charged on the importation of products and varies according to each type of product.
- The Tax on Financial Operations (IOF) is levied on credit, exchange, and insurance operations.
- The Contribution for Intervention in the Economic Domain (CIDE) is a contribution on payments made abroad for technology contracts, trademark and patent licensing, technical assistance, and is also charged on fuel.
- The Rural Land Tax (ITR) is a federal tax levied on rural properties.
- Social Security contribution (INSS) is mandatory for workers and employers, levied on employee salaries, self-employed workers, and business owners.
State Taxes:
- The Value-Added Tax (ICMS) is perhaps the most significant, applied to the circulation of goods and services. The rate varies between states, typically ranging from 4% to 25%.
- The Vehicle Ownership Tax (IPVA) is an annual tax on vehicle ownership. The rate varies by state and vehicle type.
- The Inheritance and Donation Tax (ITCMD) is levied on inheritance and donations, with rates also varying by state.
Municipal Taxes:
- The Tax on Services (ISS) is a tax on service provision, with rates ranging from 2% to 5%.
- The Municipal Real Estate Property Tax (IPTU) is an annual tax on urban real estate.
- The Municipal Property Transfer Tax (ITBI) is levied on property transfers. The rate varies by municipality.
- Municipalities may charge an Establishment Inspection Fee (TFE) to cover the cost of local inspection services.
Please note that this presentation covers only the main taxes . Additional taxes and contributions specific to certain products and activities exist . The rates mentioned are for illustrative purposes, and each company should conduct a tax study to determine the applicable rates . ORGATEC is here to assist you in understanding these complexities .