Brazil is known for having a high tax burden on its citizens and companies. We will provide an overview of the most common taxes in Brazil, dividing them into Federal, State and Municipal.
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 will give you a high-level overview of what taxes 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 - Remittances to Abroad
CIDE applied over remittances to other countries 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 companies that import or commercialise items and assets covered by the tax.
The name CIDE applies in other cases too like on the commercialisation of fuel and on telecommunication services, and the calculation differs. For more information check out article “Introduction to CIDE”.
Cofins is the abbreviation for Contribuição Social para o Financiamento da Seguridade Social and is a tax for Social Security Financing applied to monthly invoicing.
Contribuição Social para o Financiamento da Seguridade Social is a state tax paid by companies who collect taxes based on added value.
Rate: From 0% to 7.6%, depending on the company profile.
CSLL, acronym for Contribuição Social sobre o Lucro Líquido das Pessoas Jurídicas, is a social contribution on net income that applies to a company’s net profit.
It is charged on every legal entity with presence in the country and those that are treated by tax legislation.
Rate: From 9% to 15%
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 determined by the products NCM and paid by the importer, the recipient of the international shipping named by the sender, those who are acquiring the commodity and the bidder of seized or abandoned products.
Rate: Details can be found in The Brazil Business tax index.
IOF is a tax charged on financial transactions such as operations involving credit, currency exchange, insurance and security.
In credit operations, it is paid by private individuals and legal entities that use credit; in exchange operations, by those involved in transactions concerning foreign currency and in insurance operations.
It is paid by insured legal entities and private individuals; in security operations, by those who acquire security and financial institutions.
Rate: From 0.38% to 25%
Short for Imposto sobre Produtos Industrializados, IPI is applied to national and foreign products that have been modified in some industrialised way for consumption or use.
IPI is a federal tax paid by the local manufacturer or by the importer of the goods, and the rate is based on the products NCM code.
Rate: From 0% to 300%, more information can be found in our tax index guide.
ITR, short for Imposto Territorial Rural, is a rural land tax that applies to properties 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, or Contribuição para os Programas de Integração Social e de Formulação do Patrimônio do Servidor Público, is based on gross revenue earned by all types of legal entities including nonprofit and organisations held by the government.
PIS is a federal tax charged directly and paid by the legal entities mentioned above.
Rate: From 0.65% to 1.65%
IRPF, or Imposto de Renda de Pessoas Físicas, is the personal income tax that each individual is 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.
Imposto de Renda de Pessoas Físicas is a federal tax paid by private individuals living in Brazil and also by private individuals living abroad but receiving taxable income in Brazil.
Rate: From 0% to 27.5%
Imposto de Renda de Pessoa Jurídica is the full name of IRPJ, and is the corporate revenue tax that applies to the net profits of any legal entity in Brazil.
IRPJ is a federal tax paid by public or private legal entities based in Brazil, regardless of their purposes or nationality.
Rate: 15 % or 25%
IRRF is the abbreviation for Imposto de Renda Retido na Fonte and corresponds to the income tax withheld at source.
It applies to labour income, capital income, remittances abroad and other incomes, such as prizes, advertising services provided by legal entities and remuneration for services provided by legal entities.
Rate: From 7.5% to 27.5%
IE is the abbreviation for Imposto sobre a Exportação, it is an import tax applied to the exporting of national products.
The calculation basis is the financing price that the product would reach on the international market under free competition conditions. Imposto sobre a Exportação is a federal tax that is paid by the exporter of the goods from Brazil.
Rate: From 30% to 150%
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 which applies to the movement of goods, transportation and communication services and to supplying any goods.
It is paid by private individuals and legal entities who commercialise any goods, by those who import products from abroad, those who acquire goods seized by customs and those who acquire petroleum products from abroad.
Rate: From 4% to 25%
Imposto sobre a Propriedade de Veículos Automotores or IPVA is a vehicle tax applied to the possession of motorised vehicles like cars, trucks, motorcycles, etc.
IPVA is a state tax and must be paid by anyone who owns a motorised vehicle.
Rate: From 1.5% to 4%
Imposto sobre a Propriedade Predial e Territorial Urbana, known as IPTU is a real estate tax applied to properties located within urban limits.
IPTU is a tax charged by the municipality and must be paid by the property owner or tenant in case of rental property.
Rate: varies according to the municipality, location of the property and property size.
ITBI, or Imposto sobre Transmissão Inter Vivos de Bens Imóveis e de Direitos a eles Relativos, applies to property and transmission rights related to it.
ITBI is a municipal tax and it is paid by the buyer or the transferee of the property or right.
Rate: Often between 2% and 3%, depending on the municipality.
Imposto sobre Serviços or ISS is a tax applied to 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: Maximum 5%
More Tax Information
Rules and laws related to taxation are changing fast in Brazil. In fact, there is a daily newspaper called Diário Oficial 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 below to send us your inquiry.