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The Brazil tax rate for companies and physical income returns is relatively simple to calculate.
Although tax rates vary for corporate tax, depending on what type of tax regime that company has, the income tax tables for individuals works to standard income tax rates based on income.
Individual income tax rates are often abreviated to IRPF – Imposto de Renda da Pessoa Fisica.
Company income tax rates are abreviated to IRPJ – Imposto de Renda da Pessoa Jurídica.
Company Tax Profits
Days worked to pay tax Only (2020 IBPT)
Of Salary goes to tax (2020 IBPT)
Tax free income per year
There are two main types of Income tax rate calculations. IRPF which is for individuals, and IRPJ which is for corporate tax rate determinations.
The individual income tax rate can be calculated monthly or annually for income tax return purposes. Below are tha annual tax rates for Brazil:
Up to R$ 22.847,76 is exempt from tax.
From R$ 22.847,77 to R$ 33.919,80 – 7.5% tax rate with R$ 1.713,58 exempt
From R$ 33.919,81 to R$45.012,60 – 15% tax rate with R$ 4.257,57 exempt
From R$ 45.012,61 to R$55.976,16 – 22,5% tax rate with R$ 7.633,51 exempt
Above R$ 55.976,16 – 27,5% tax rate with R$ 10.432,32 exempt
There are 4 main types of company entities that can be used in Brazil. Each with its own tax regime and rates:
MEI – Essentially a sole proprietor which pays fixed income tax rate included in the monthly tax.
Nacional Simples – A simplified tax regime that has a single tax rate that increases as monthly turnover increases. The income tax contribution is covered in the monthly tax contribution.
Lucro Presumido – Income tax paid quarterly based on 35% profit for services or 8,8% profit for products sold for that quarter.
Lucro Real – what is typically American or European tax regime with tax credits and debits and declared profit.
- 15% tax rate up to R$20 000 per month profit
- 10% additional tax rate over and above this
- +9% CSLL social tax.
Giving an effective income tax rate of 34% on corporate tax profit.
Please note this is done quarterly and all credits carried forward.
At AA Tax we can do both personal income tax queries or returns and also a full operation tax analyses for any size business.
