Welcome to ORGATEC’s channel! Do you know how the tax rules for fixed assets work in Brazil? If your company owns machinery, equipment, real estate, vehicles, or any other assets in its operations, this content is for you! Today, we’ll explain the main points that every company needs to know to ensure compliance and optimize tax planning.
What are Fixed Assets?
Fixed assets represent tangible goods used in the company’s activities, such as machinery, equipment, vehicles, and real estate. The key characteristic of these assets is that they are not intended for sale, but for use over more than one fiscal year, meaning they have a long useful life and generate future economic benefits.
Recognition Criteria:
For an asset to be recorded as a fixed asset, it must meet three main conditions:
- Be used in the company’s operations.
- Have a useful life of more than 1 year.
- Have a relevant value that justifies accounting control.
An important point here is the value rule: assets valued at up to R$ 1,200.00 or with a useful life of up to 1 year may be deducted as an expense, without the need to capitalize them. Assets above this value and with a useful life longer than 1 year must be capitalized.
Tax Depreciation:
The Brazilian Federal Revenue Service (Receita Federal) establishes tables with depreciation rates by type of asset. These rates determine the annual amount that can be depreciated for Corporate Income Tax (IRPJ) and Social Contribution on Net Profit (CSLL) purposes.
For example, the following tax depreciation periods apply:
- Computers: 5 years
- Vehicles: 5 years
- Machinery and equipment: 10 years
- Real estate: 25 years
These rates are established by the Federal Revenue Service and directly affect the calculation of Corporate Income Tax (IRPJ) and CSLL.
Incentives and Limitations:
From a tax perspective, it is generally not allowed to accelerate depreciation. Exceptions exist in specific cases provided by law, such as for assets used in multiple work shifts.
Control and Obligations:
Companies must keep detailed records of fixed assets. This includes the acquisition date, value, accumulated depreciation, and any disposals. This control is essential to meet tax requirements and ensure proper asset management.
Conclusion:
In summary, knowing the tax rules for fixed assets in Brazil—including the R$ 1,200.00 recognition threshold and the correct application of depreciation—is essential to keep your company compliant with the tax authorities and to optimize tax planning. Count on ORGATEC for this and other tax matters!