Now, to make it easier to understand, let’s look at two practical examples.
Example 1: Service Provider Company for a Parent Company Abroad
Imagine a company in Brazil that has employees, owns one vehicle, rents its office space, and provides services exclusively to its parent company abroad. What are the main taxes and contributions it would have to pay?
- Over the payroll: Income tax, INSS, and FGTS. It’s important to note that although FGTS is not a tax, it is an obligation for the company to pay.
- Over the vehicle: IPVA at the beginning of the year.
- Over the property: IPTU.
- Over the export of services: Generally, the taxation would be ISS, PIS, and COFINS. However, there are specific rules related to exportation that may exempt the payment of these taxes.
- Over the profit: IRPJ and CSLL.
- Others: Payment of TFE in the middle of the year and potential withholding taxes such as income tax, PIS, COFINS, CSLL, ISS, and INSS in specific situations.
In summary, this company would pay: Income tax, INSS, FGTS, IPVA, IPTU, ISS, PIS, COFINS, IRPJ, CSLL, TFE, and withholding taxes.
Example 2: Company that Imports and Resells Manufactured Products
Now, let’s consider a company in Brazil that also has employees, owns one vehicle, rents its office space, but imports and resells manufactured products.
This company will basically pay the same taxes mentioned in the first example, with the addition of taxes related to the import and resale of products.
- On import: I.I., ICMS, IPI, PIS, COFINS, and additional fees such as the SISCOMEX fee.
- On resale: ICMS, IPI, PIS, and COFINS.
In summary, the taxes for this company would be: Income tax, INSS, FGTS, IPVA, IPTU, I.I., ICMS, IPI, PIS, COFINS, SISCOMEX fee, IRPJ, CSLL, TFE, and withholding taxes.
Please note that this presentation covers only the main taxes. There are additional taxes and contributions specific to certain products and activities. The rates mentioned are for illustrative purposes only, and each company should conduct a tax study to determine the applicable taxes.
ORGATEC is here to assist you in understanding these complexities and ensuring your business remains compliant with Brazilian law. If you have any questions or need further assistance, please feel free to contact us.