* Tax systems and institutions



There are 58 kinds of tax in Brazil, which can be divided into federal tax, state tax and municipal tax according to administration. Among them, the federal tax includes income tax, industrial product tax, import tax, export tax, financial operation tax, temporary financial circulation tax, rural land tax, etc. State taxes include commodity circulation tax, vehicle tax, estate and gift tax, etc. Municipal taxes include social services tax, urban real estate tax, real estate transfer tax, etc. In addition, the enterprise still pays all sorts of social expenses, include fund of fund of fund of insurance of social insurance, length of service specifically, social integration plan expends, social security expends. The Brazilian government collects and manages taxes at different levels.







* Major taxes and rates



I. Federal taxes



(I) Income Tax (Imposto DE Renda)



Divide enterprise income tax, individual income tax and source income tax 3 kinds.



Corporate income tax (IRPj-imposto DE Renda das Pessoas Juridicas) : it is collected in four times a year, and the deadline is March 31, June 30, September 30 and December 31 respectively. When the adjusted gross taxable income of the enterprise income tax is less than R $240,000, the tax rate is 15%; Over R $240,000, an additional 10% increase.



Personal income tax (IRPF-imposto DE Renda das Pessoas Fisicas) : The monthly income of less than R $1,058 is exempt from income tax; Monthly income between R $1,058.01 and R $2,115, tax rate 15%; Monthly income above r $2,115, tax rate 27.5 percent. 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. In accordance with decree No. 73 of the Competent Tax authorities of Brazil of 23 July 1998, aliens with the right of abode shall pay income tax in accordance with the foregoing individual income tax rates on the aggregate amount of their income in Brazil and abroad; Aliens with no right of abode shall, within 12 months of their entry into Brazil, withhold 15 per cent on the source of their income in Brazil; If he/she has stayed in Brazil for more than 183 days during the aforesaid period, he/she shall, from the 13th month onwards, pay income tax at the aforesaid individual income tax rate on the total amount of his/her income in Brazil and abroad; If he obtains the right of abode within 12 months, he shall, from the next day after the acquisition, pay income tax at the said individual income tax rate on the total amount of his income in Brazil and abroad. This restriction does not apply to those who have a double taxation avoidance agreement with Brazil.



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 crediting basis are different.



The Brazilian government inspects income taxes every year, so companies or individuals must keep their tax receipts for five years.



2. Ipi-imposto DE Produtos Industrializados



The tax rate is between 0 and 55%, and the average tax rate is about 16%. This tax is paid by the industrial production enterprises and, in the case of imported goods, by the importer at customs clearance. Taxes paid on industrial products such as raw materials, semi-finished products and packaging materials may be used as tax credits. Taxes on industrial products are progressive.



(III) Import Duty (II-IMposto da Importacao)



Import tax rates vary according to different goods. The average tax rate is now 17 per cent. Low or zero rates for general raw materials, such as 5 per cent for refractory materials and 5 per cent for capital products; General consumer goods for 20~30% or so.



(iv) Export tax (IE-imposto da Exportacao)



To encourage exports, export taxes are levied in a very narrow range.



(v) Financial operation tax (IF-imposto DE Operacao Financeira)



The tax rate is 2%. The tax is levied on foreign exchange purchases, bank credits, insurance, securities transactions, etc.



Cpmf-contribuicao DE Propriedade Provisoria Sobre Movimentacao Financeira is levied for three years starting from June 17, 1999. The tax rate is 0.38%.



Itr-imposto DE Propriedade Territorial Rural



Rates range from 0.03 per cent to 20 per cent, depending on the land area and extent 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%.







2. State taxes



(1) Commodity Circulation Service Tax (ICMS-Lmposto DE Circulacao DE Mercadorias e Servicos, equivalent to VALUE-ADDED tax) is a progressive tax. Based on the total amount of commercial invoices, there are two tax rates, 17% and 18%, and 18% for the Canton of Sao Paulo. (This means that transactions within the state are subject to tax reduction under an agreement with the state, if they are sold from the state to other Brazilian states, such as Brasilia and the northern states, only 7%.) If sold to the south - central states, only 12%. The same is true in other states), at 17 per cent in all other states. 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 the tax. However, if it is an imported commodity, part of it will be withheld first when it is imported (10% withheld by Sao Paulo state, 5% withheld by northeast states), but it is allowed to be deducted when this tax is paid after the sale of the importer's goods (some states allow imported products to be paid within 60 days after the sale).



Ipva-imposto DE Propriedade DE Veiculos Automotores.



(3) Itd-imposto DE Transmissao Causa Mortis e Doacao







3. Municipal taxes



(I) Social Service Tax (ISSS-IMposto Sobre Servico 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 according to floor area, floor area and value, can be paid in one time or installment.



(3) Itbi-imposto do Transmissao DE Bens Imoveis;



Tax rates range from 2 to 6 percent.



Contribuicao Social



Contribuicao Social Sobre o Lucro das Pessoas contribuicas



The tax is based on the amount of the company's turnover or actual profits. For enterprises based on turnover, the tax rate is between 1.08% and 2.88%. 1.08 per cent for industry and commerce; Service industry 2.88%. For businesses that are taxed on their profits, the rate is 9 per cent.



Contribuicao Para a Seguridade Social, sometimes known as CINSS



Tax rates range from 26.8 per cent to 28.8 per cent, depending on the number of employees, and are deposited with the Caixa Economica Federal.



(III) Age Guarantee Fund (FGS-Fundo DE Garantia do Tempo DE Servico, similar to age subsidy)



Enterprises pay 8% of their gross wages every month and deposit them in the Federal Reserve Bank of Brazil.



(4) For an enterprise which is taxed on the basis of its turnover or actual profits, the tax rate shall be 0.65%; For profit-based enterprises, the tax rate is 1.65 percent.



5. Confins-financial amento da Seguridade Social



The amount of tax shall be calculated on the basis of the company's turnover or the amount of its actual profits. For enterprises which are taxable on the basis of turnover, the tax rate shall be 0.75%. For enterprises that are taxed on their profits, the tax rate is 3%.



(Contribuicao Sindical Patronal)



Based on the amount of capital declared by member companies, the tax rate is between 0.02% and 0.8%.



Among the above taxes, the main investment-related taxes are enterprise income tax, individual income tax, industrial product tax, commodity circulation service tax, temporary financial circulation tax, corporate profit donation, social security fee, social integration planning fee, social insurance premium and labor union fee.







Brazilian taxes related to investment



items



Tax base



Tax rate



Enterprise Income Tax (IRPJ)



turnover



When the taxable income is less than R $240,000, the tax rate is 15%; Over R $240,000, an additional 10% increase.



Personal income tax (IRRF)



Declare a month



Monthly income of less than R $1,058 is exempt from income tax; Monthly income between R $1,058 and R $2,115, tax rate 15%; Monthly income above r $2,115, tax rate 27.5 percent.



Industrial Product Tax (IPI)



Invoice price



0~55%, 16% on average



Commodity Circulation Services Tax (ICMS)



Invoice price



0 ~ 25%



Temporary Financial Liquidity Tax (CPMF)



Amount drawn or transferred



0.38%



Corporate Profit Donation (CSL)



Turnover or actual profit



For enterprises based on turnover, the tax rate is between 1.08% and 2.88%. 1.08 per cent for industry and commerce; Service industry 2.88%. For businesses that are taxed on their profits, the rate is 9 per cent.



Social Security Dues (COFINS)



Turnover or actual profit



For enterprises taxed on turnover, the tax rate is 0.75%; For enterprises that are taxed on their profits, the tax rate is 3%.



Social Integration Tax (PIS)



Turnover or actual profit



For enterprises that are taxed on turnover, the tax rate is 0.65%; For profit-based enterprises, the tax rate is 1.65 percent.



Social Security (INSS)



Total salary declaration



Classify tax rates according to the number of employees in a company. Tax rate between



Between 26.8% and 28.8%.



Male membership fee (CSP)



The amount of capital declared by a member company



Between 0.02% and 0.80%, depending on industry.