Brazil is one of the most heavily taxed countries in South America, with a total of 58 taxes




Brazil is one of the South American tax is heavier, a total of 58 species of all kinds of tolls, chief among them are: income tax, import duties, financial operation, rural land tax, vehicle tax, social services, tax, real estate transfer tax, social insurance, social integration JiHuaFei, industrial product tax, export tax, temporary financial circulation tax, commodity circulation tax, estate and gift tax, urban real estate tax, corporate profits tax, length of service guarantee fund, social security fees, etc









Brazil's various taxes are equivalent to 30% of gross domestic product. When exporters first visit Brazil, they often find that the retail price here is 3-5 times of the CIF value, which leads them to conclude that the operating profit in Brazil will be high. However, after practice, they realize that the high tax in Brazil makes it difficult to make money. Take import as an example, the cost of imported goods after duty paid is usually 1.8-2 times of the CIF price. If you go to Brazil to do business, there are various taxes, multifarious, if not careful accounting, investment is doomed to failure. Brazil's taxes are so complex that only a cursory description can be given.









Brazil's taxes are administratively divided into three levels: federal tax, state tax and municipal tax. The government collects and manages taxes at different levels. In addition, the enterprise also has to pay various social expenses.









1. Types of taxes









(I) Federal taxes









A, income tax (Imposto DE Renda)- there are three types of income tax: corporate income tax, individual income tax and source income tax.









Corporate income tax (IRPj-imposto DE Renda das Pessoas Juridicas) : the income tax is collected in four times per year and ends on March 31, June 30, September 30 and December 31 respectively. The corporate income tax rate is generally 15%, and income above a certain level is subject to a 10% surcharge.









Personal income tax (IRPF-imposto DE Renda das Pessoas Fisicas) : no income tax on monthly income of r $900 or less; Monthly income between r $900- R $1800 pay 15%; Monthly income above r $1800 pays 27.5%. Any profitable business activity, such as buying and selling houses, land, assets or interest income, shall be subject to income tax on commercial invoices or bank interest payments.









Irrf-imposto DE Renda Retido na Fonte (irrF-imposto DE Renda Retido na Fonte) : tax collected on labor profits, income from financial transactions, repatriation of interest and commissions, income from advertising, lottery profits, etc. The tax rate and the basis of the plan are not the same.









The government checks income tax every five years, so companies and individuals must keep their tax receipts for five years.









B/IPI-imposto DE Produtos Industrializados. The average tax rate is 10%. This tax is paid by the industrial production enterprises and, in the case of imported goods, by the importer at customs clearance. Taxes on industrial products are progressive.









C, Import duty (II-IMposto da Importacao). Import tax rates vary according to different goods. The average tax rate is now 17 per cent. General raw materials with low or zero tax rates, such as refractories of 5%; Capital goods were also lower, at 5%; General consumer goods for 20-30% or so.









D) Export tax (IE-imposto da Exportacao). In order to encourage exports, the scope of export tax is very narrow.









E, IF-imposto DE Operacao Financeira, tax rate of 2%. The tax is levied on foreign exchange purchases, bank credits, insurance, securities transactions, etc.









F, Provisional financial contribution (CPMF-CONTRIBUicAO Provisoria sobre Movimentacao Financeira), at the rate of 0.3 per cent.









G, ITr-Imposto DE Propriedade Territorial Rural, whose tax rate is between 0.03% and 20% according to the land area and level of use. For example, for more than 5,000 hectares of land, the use of more than 80% of the tax rate is 0.45%; If the degree of use is less than 30%, the tax rate is 20%.









(ii) State taxes









A, Goods Circulation And Services Tax (ICMS-Imposto DE Circulacao DE Mercadorias e Servicos, equivalent to value-added tax)- progressive tax, based on the total amount of commercial invoices. There are two rates, 17% and 18%, 18% for the Lx {711a} der DE Sao Paulo and 17% for all other states (both refer to intra-state transactions. In the case of a sale from one state to another, the tax reduction is subject to a state-to-state agreement. In the case of a sale from Sao Paulo to Brasilia, only 7% of the ICMS is paid to the Government of the State of Sao Paulo. If sold to the south - central states, only 12%. Taxes are paid to the state department of Finance, of which only 75% belong to the state department of finance and the remaining 25% to the municipal department of Finance. Exports are exempted from ICMS. However, in the case of imported goods, a withholding is made at the time of importation, but is allowed to be deducted when the duty is paid by the importer after the sale of the goods.









D. Ipva-imposto DE Propriedade DE Veiculos Automotores.









C, estate, gift tax (itd-imposto DE Transmissao Causa Mortis e Doacao).









(3) Municipal taxes









A, Social Services Tax (ISSS-Imposto Sobre Servicio Social). Such as valet processing fees, maintenance fees, labor fees and other payable income 1.5%.









Iptu-imposto DE Propriedade predial e Territorial Urbana. Real estate tax is calculated on the basis of floor area, floor area and value. Payment may be made in a lump sum or in installments.









C, itbi-imposto DE Transmicao DE Bens Imoveis). Tax rates range from 2% to 6%.









To Contribuicao Social, as:









Csl-contribuicao Social Sobre o Lucro das Pessoas Juridicas, at the rate of 8% and 18% for financial institutions, on the basis of profit;









Contribute to the CsS-CONTRIBUicao Para a Seguridade Social (sometimes known as CINSS), 8-10% of the employee's wages, and 20% of the employer's total wages, deposited with the Caixa Economica Federal;









Fgs-fundo DE Garantia do Tempo DE Servico (similar to a seniority subsidy), 8% of a firm's monthly payroll, is deposited with the Federal Reserve Bank of Brazil.









Social Integration Project fee (PCIS DE Integracao Social- essentially the employee bonus plan reserve fund), 0.65% of the total sales amount of enterprises and 0.75% of financial institutions;









COFINS- Financial amento DE Seguridade Social, the tax rate is 2-3%, based on the gross income of the enterprise. Financial institutions do not have to pay taxes;









Preferential treatment and reduction of taxes









Since the Brazilian government adopts a hierarchical management of taxation at the federal, state and municipal levels, tax concessions and exemptions can only be carried out within the scope of authorization and cannot be exceeded. For example, states can only make deductions for state taxes, but not for federal and municipal taxes.









Under the Uniform Act, the state may grant tax breaks to different industries and regions throughout the country.









A. In order to develop northeast Brazil (9 cantons), Brazilian enterprises (including joint ventures with Brazilian capital accounting for more than 50%) can apply for the exemption of corporate income tax for 10 years, and the expiry date can be extended for 10 years;









B. Manaus Free Zone. It was created by the federal government to develop the northern territory, which enjoys special incentives (see "Manaus Free Zone" in "Market Research");









C. Small enterprises with annual turnover of 120,000 to 720,000 reais and micro enterprises with annual turnover of 120,000 reais or less are exempt from income tax, social security, financial tax, etc. Enterprises are only required to pay a certain percentage of the unified tax on small and micro enterprises (6.5-10%) based on their annual turnover. Small and micro enterprises that do not pay industrial tax must pay an additional 0.5 per cent flat tax on small and micro enterprises;









D) Each state and city has its own industrial development zones and has adopted a series of tax breaks to attract foreign investment.









E, Goods circulation Service Tax (ICMS) deductible for exports.