06/05/11 - 14h27

The 16 Most Common Brazilian Taxes

Brazil is known for charging a high tax burden from its citizens and companies established. We will provide an overview of the most common taxes in Brazil, dividing them into Federal, State and Municipal taxes.

Taxes are an important part of doing business in Brazil. In fact, more than half of the inquiries we receive from our readers are related to taxation.

Although this round-up of the 16 most common taxes in Brazil is giving you a high-level overview of what taxes will apply when doing business in Brazil, we strongly urge you to contact taxation experts that can evaluate your business case.

Some of the taxes mentioned below are cumulative and others might be refundable if special conditions are met.

CIDE

CIDE is the abbreviation for Contribuição e Intervenção no Domínio Econômico and corresponds to the economic domain intervention contribution and it applies to royalty payments, technology transfers and compensation of technology supply, and technical assistance.

It must be paid by those who import or commercialize items and assets covered by the tax.

Rate: 10%

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Cofins

Cofins is the abbreviation for Contribuição Social para o Financiamento da Seguridade Social and is a tax for Social Security Financing applied to the monthly invoicing.

Contribuição Social para o Financiamento da Seguridade Social is a state tax paid by the companies who collect taxes based on added value.

Rate: 3% or 7,6%

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CSLL

CSLL - or Contribuição Social sobre o Lucro Líquido das Pessoas Jurídicas - is a social contribution on net income that applies to the net profit.

It is charged over every legal entity resident in the country and those that are treated by tax legislation.

Rate: From 9% to 15%

Import Duty

Imposto sobre a Importação, or simply II in Portuguese, is an import duty that applies to the entrance of foreign products in Brazil.

It is charged over the importer, the recipient of the international shipping named by the sender; the one who is acquiring the commodity and the bidder of seized or abandoned products.

Rate: Can be found in our tax database

• Importing to Brazil
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IOF

IOF is a tax charged over financial transactions, such as operations involving credit, currency exchange, insurance and security.

In credit operations, it is paid by private people and legal entities that use credit; in exchange operations, by those involved in transactions concerning foreign currency; in insurance operations.

It is paid by insured legal entities and private people; in security operations, by those who acquired security and financial institutions.

Rate: From 1% to 25%

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IPI

Short for Imposto sobre Produtos Industrializados, IPI is applied to the output of national goods from the factory, to customs clearance when the product comes from abroad and to public sales.

Produtos Industrializados is a federal paid by the industry owner and by the importer of the goods.

Rate: From 0% to 300%, more information can be found in our tax database

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ITR

ITR (Imposto Territorial Rural) is a rural land tax that apllies to the property located outside the urban area.

Imposto Territorial Rural is a federal tax paid by the property owner.

Rate: From 0,03 % to 20%

PIS/Pasep

PIS/Pasep, or Contribuição para os Programas de Integração Social e de Formulação do Patrimônio do Servidor Público, applies to gross revenues earned by all types of legal entities including non-profit makers and organizations held by the government.

PIS is a federal tax charged directly paid by the legal entities mentioned above.

Rate: From 0,65% to 1,65%

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IRPF

IRPF, or Imposto de Renda de Pessoas Físicas, is the personal income tax that each person are required to deduct of their annual income. Individuals that earn less than two times the minimum salary are not liable to pay personal income tax.

Renda de Pessoas Físicas is a federal tax paid by private people living in Brazil and also by private people living abroad but receiving taxable income in Brazil.

Rate: From 0% to 27,5%

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IRPJ

Imposto de Renda de Pessoa Jurídica is the full name of IRPJ, this is the corporate revenue tax and applies to the net profits of any legal entity in Brazil.

IRPJ is a federal tax paid by public or private legal entities residing in Brazil, regardless on their purposes or nationality.

Rate: 15 % or 25%

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IRRF

IRRF is the abbreviation for Imposto de Renda Retido na Fonte and corresponds to the income tax withheld at source.

It applies to labor income, capital income, remittances abroad and other income, such as prizes, advertising services provided by legal entities and remuneration for services provided by legal entities.

Rate: From 15% to 27,5%

IE

IE is the abbreviation for Imposto sobre a Exportação, it is an import tax applied to the exportation of national products.

The calculation basis is the financing price that the product would reach in the international market under free competition conditions. Imposto sobre a Exportação is a federal tax that are paid by the exporter of the goods from Brazil.

Rate: From 30% to 150%.

ICMS

ICMS, the abbreviation for Imposto sobre Operações Relativas à Circulação de Mercadorias e Serviços de Transporte Interestadual e Intermunicipal e de Comunicações, is a value-added tax on sales and services and applies to the movement of goods, transportation and communication services, and to the supplying of any goods.

It is paid by private people and legal entities who commercialize any good; by those who import products from abroad; those who acquired the goods seized by customs and those who acquire petroleum products from abroad.

Rate: From 7% to 25%

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IPVA

Imposto sobre a Propriedade de Veículos Automotores (IPVA) is a vehicle tax applied to the possession of motorized vehicles (cars, trucks, motorcycles, airplanes, boats, etc).

IPVA is a state tax and must be paid by anyone who owns a motorized vehicle.

Rate: From 2% to 5%

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IPTU

Imposto sobre a Propriedade Predial e Territorial Urbana (IPTU) is a real-estate tax applied to the property located within urban limits.

IPTU is a tax charged by the municipality and must be paid by the property's owner.

Rate: varies according to the municipality

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ITBI

ITBI, or Imposto sobre Transmissão Inter Vivos de Bens Imóveis e de Direitos a eles Relativos, applies to the property and transmission rights related to it.

Imposto sobre Transmissão Inter Vivos de Bens Imóveis e de Direitos a eles Relativos is a municipal tax and it is paid by the buyer or the transferee of the property or right.

Rate: Usually 2%

ISS

Imposto sobre Serviços (ISS) is a tax applied to the services provided to a third party by a company or professional and is paid by the service provider.

The calculation basis comprises the monthly income of the taxpayer and the price of the service.

Rate: Around 5%

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More Tax Information

Rules and laws related to taxation are changing fast in Brazil. In fact, there is a daily newspaper that covers only law changes and a major part of it is dedicated to changes concerning taxation.

If you feel that you need more information or a recommendation for further steps, please use the contact form bellow to send us an inquiry.