In Portuguese Contribution for Social Security Financing is named Contribuição Social para o Financiamento da Seguridade Social and often referred to by the abbreviation COFINS.
This contribution,COFINS, is similar to PIS and INSS as it is intended to finance welfare, health and social programs.
COFINS is calculated over the gross revenue of private legal entities in Brazil. Currently COFINS is the second largest source of tax revenue for the Brazilian government, and the rate largely varies depending on the tax regime the company operates under. The list of tax regimes related to the COFINS' rate per activity are found bellow.
Lucro Real (Real Profit)
- 7.6% on Commerce, Industrial and Service activities.
- Contribution is calculated on monthly revenue unless the company operates under a non-cumulative tax regime.
Lucro Presumido (Presumed Profit)
- 3.0% on Commerce, Industrial and Service activities.
- the value of the contribution is calculated directly from the calculation basis if the regime chosen was a cumulative. In this case, there is no deduction of credits.
Simples Nacional (Special Brazilian Regime)
- 0.00% to 1.60% for Commerce and Industrial activities.
- 0.00% to 2.42% for mobile or movable property lease.
- 1.28% to 2.63% for Services.