BRAZIL TAX RATE

Tax Payable or due can be the make or break of your Business in Brazil!

Brief Summary – Brazil Tax Rate

When determining company tax rate or sales tax or vat in Brazil we must first determine the following aspects:

  1. Are you selling a product or service? Each of these has different state and federal taxes to pay. Below is a list summarizing the main taxes payable each with its own tax rate:
    - ICMS (vat or sales tax)
    - PIS
    - CONFINS
    - IPI
    - ST
    - ISS
  2. What legal entity or company type is being operated. There are 4 main types of tax companies, each with their own corporate tax regime and tax rates.
  3. Brazil is a federal state. That means there are municipal, state and federal taxes to pay. These tax rates vary from state to state.
Brazil Tax Rate
CONTACT NOW
Brazil Tax Rate

5

Types of tax Companies

Brazil Tax Rate

8

Types of Tax rates

Brazil Tax Rate

34%

Tax rate on profit

Brazil Tax Rate

18%

Average ICMS - VAT

How does Tax Rate Work?

You always need to do a full tax planning exercise to determine the best tax rate option for Brazil. There are a lot of variations and each affects significantly total tax payable and even viability of the operation.

Brazil Tax Rate

Select Tax Regime

The following tax regimes are available for most segments or services:

MEI – sole proprietor
Nacional Simples – increasing tax rate based on turnover but no tax credits allowed. Limited to US$880 000 per year.
Lucro Presumido – predetermined tax rates and annual profit tax rate based on turnover irrespective of profit.
Lucro Real – Tax rates allow credit of value-added operations and annual profit based on real profit with tax rate up to 34%.

Corporate tax rates in Brazil therefore are more complex than in most countries.

Brazil Tax Rate

Analise the Taxes

Product Sales will have the below taxes depending on their HS code (NCM in Brazil):

ICMS – a type of VAT or sales tax that varies from 7% to 21% depending on state and segment (alcohol and energy segments have higher tax rates for instance)

PIS and CONFINS – social taxes that go up to 9,25%

IPI – variable tax rate for Imported and Industrialized products

ST – Substituição Tributaria – special regime tax for retail or products that have high tax evasion

When providing Services tax rates will depend on the local municipality ISS aliquot for that type of service. Which varies from 2% to 5% plus the company regime tax to be applied.

Brazil Tax Rate

Income Tax

Using the corporate tax regime chosen and then considering relevant taxes for that product or service, profit projections can now be made. Each of those Brazili tax rates has special rules with regards to credits and payment due.

For specific information on tax please consult our services page on the link below: