Introduction to CIDE
Brazil is a country of many taxes and that’s no surprise for anyone. The Contribuição sobre Intervenção do Domínio Econônomico (best known as CIDE) is an important and complex tax levied on some specific products in Brazil. The article will outline the main aspects of this tax and how it’s applied throughout the country.
What is CIDE?
The CIDE is the abbreviation of Contribuição sobre Intervenção no Domínio Econômico, which is a contribution of Intervention in the Economic Domain can be levied in many areas of the economy. The contribution is always for the improvement or activities linked to the sector in which its incident.
The contributions of Intervention in the Economic Domain have always been a subject of controversy within the National Tax Code regarding its taxation nature. With the 1988 Constitution, Chapter I, The National Tax System in art. 149, established that such contributions are compulsory and therefore are taxes. The CIDEs, are used as an instrument of economic policy to deal with certain situations that require intervention from the State in the economy.
Types of CIDEs
CIDE is also a responsibile for the Brazilian Government and works as an instrument for State economic intervention, there are a few types of CIDEs that are in force in Brazil nowadays:
CIDE - Remittances to Abroad
| CIDE | CIDE - Remessas para o Exterior/CIDE - Royalties or CIDE - Remittances to Abroad |
| Taxable Event | Payments of amounts to residents abroad, by a source located in Brazil, such as payment of royalties, technical services, copyrights, and other compensation derived from contractual obligations involving technology transference. |
| Taxpayers | Holders of use or exploitation licenses and signatories of technology transference agreements. |
| Calculation Basis | Value paid or remitted to abroad. |
| Rate | 10% |
| Designation | Financing of Science and Technology Programs, research incentives and technological innovation. |
CIDE - Fuels
| CIDE | CIDE - Combustíveis or CIDE - Fuels |
| Taxable Event | Importation and Commercialization of oil, natural gas and others fuels in the internal market. |
| Taxpayers | Fuel Producers and/or Importers. |
| Calculation Basis | Measure unity, the m³, ton. |
| Rate | Has an specific rate, a amount of BRL by m³ or by ton.
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| Designation | Financing of Environmental Projects, Projects for Transport Infrastructure and Payments of subsidies for fuels prices and transportation. |
FUST and Funttel
| CIDE | FUST and Funttel |
| Taxable Event | Generation of telecommunication for public or private services. |
| Taxpayers | Companies that are Service Providers of telecommunication services in Brazil. |
| Calculation Basis | Gross Revenue of the Companies. |
| Rate | 1.0% for FUST 0.5% for Funttel |
| Designation | Both are funds turned to the development and implementation of the telecommunication sector in Brazil, in order to make telecommunication services universal in the country. |