In this page: Corporate Taxes | Accounting Rules | Consumption Taxes | Individual Taxes | Double Taxation Treaties | Sources of Fiscal Information
Corporate Income Tax (IRPJ) | 15% - using either the "actual profits" method (APM) or the "presumed profits" method (PPM) |
Surtax on companies with taxable profits over BRL 240,000 | 10% |
Social Contribution Tax (CSLL - non-deductible) | 9% (20% for financial institutions, private insurance companies and capitalisation companies) (15% for insurance companies, foreign exchange brokers, credit cooperatives, and other similar entities) |
Effective tax rate | 34% |
Capital gains are treated the same way as ordinary income (subject to restrictions on the offsetting of capital losses against ordinary profits in certain cases).
Capital gains derived by a non-resident on an investment registered with the central bank are subject to progressive rates, as follows:
Brazilian corporate income tax law allows a deduction for interest on net equity (INE) paid or credited to shareholders, limited to 50% of the current year’s net profit or 50% of the company’s retained earnings, whichever is higher. The amount available for the deduction is computed by multiplying the company’s net equity balance by an official remuneration rate published by the Brazilian Central Bank.
Tax losses can be carried forward indefinitely. Nevertheless, the loss carry-forward is capped at 30% of taxable income (before the deduction of net operating losses). Loss carryback is not permitted.
Exemptions and reductions of corporate income tax are provided for businesses in certain less developed areas. Foreign tax credit is available for resident companies on foreign income tax paid, generally limited to the amount of CIT and SCT on the foreign income.
There are numerous other taxes levied in Brazil, including:
Brazil | Latin America & Caribbean | United States | Germany | |
---|---|---|---|---|
Number of Payments of Taxes per Year | 9.6 | 28.2 | 10.6 | 9.0 |
Time Taken For Administrative Formalities (Hours) | 1,501.0 | 327.5 | 175.0 | 218.0 |
Total Share of Taxes (% of Profit) | 65.1 | 46.8 | 36.6 | 48.8 |
Source: The World Bank - Doing Business, Latest data available.
Consult the Guide on Brazilian VAT to find import duties and taxes which apply to your product.
A municipal property transfer tax (ITBI) is levied on the transfer of immovable property, with different rates according to the municipality in which the property is located.
PIS and COFINS are levied on imports at rates of 1.65% and 7.6%, respectively, for the import of services; and 2.1% and 9.65%, respectively, on the importation of goods.
MONTHLY Taxable Income | Rates (2023) |
Below BRL 1.903,98 | 0% |
From BRL 1.903,99 to 2.826,65 | 7.5% |
From BRL 2.826,66 to 3.751,05 | 15% |
From BRL 3.751,06 to 4.664,68 | 22.5% |
Over BRL 4.664,68 | 27.5% |
Some items can be deducted from the tax due rather than from the calculation base, such as: donations made to official government, state, and/or municipal childcare entities and elderly funds; certain qualified contributions to cultural, audio-visual, and sports projects (capped at 6% of the tax due); contributions to health programs related to cancer and mentally handicapped support (capped at 1% of the tax due); private pension contributions made by the beneficiary and for one's dependents (capped at 12% of gross taxable income).
When calculating annual federal income tax liability, instead of itemised deductions taxpayers may elect for a standard deduction of 20% (up to BRL 16,754.34 in 2022, with this amount being reviewed each year).
Individuals with a business income (non-employees) may deduct the expenses necessary to produce the business' revenue, investments and expenses to maintain the business, and payments made to third parties who have an employment relationship with the respective payroll charges.
Non-residents of a non-treaty country are liable for a flat rate of 25% tax on their income earned in Brazil (no deductions are allowed). Rental income received from a property located in Brazil is taxed at 15%. Income received abroad by non-residents is tax-exempt.
Capital gains on the sale of real estate, vehicles and objects of art and collectables sold in Brazil or abroad; on stocks sold in foreign markets, as well as on interest income received from investments located offshore, are subject to a rate of 15%, and to progressive rates ranging between 17.5% and 22.5% (the latter applicable for the portion of capital gain that exceeds BRL 30 million). Non-residents are only subject to capital gains tax resulting from the sale of assets located in Brazil.
A state estate and gift tax (Imposto sobre Transmissão Causa Mortis e Doações - ITCMD) of up to 8% is applicable on transfers of real estate by donation or inheritance. For resident foreigners and non-residents, this tax applies to assets located in Brazil only.
A property tax (Imposto Predial e Territorial Urbano - IPTU) based on the fair market value of property in urban areas is levied annually at different rates depending on the municipality and location of the property (the basic rate for residential properties is 1%, 1.5% for commercial properties). The transfer of real estate properties is subject to a municipal tax (Imposto de Transmissão de Bens Imóveis Inter Vivos - ITBI) of up to 3%.
The interest earned on local loans is linked to fixed-income investments and is subject to withholding tax rates that decrease as the loan term increases. For instance, interest due for a period of up to 180 days is subject to a 22.5% withholding tax rate, while interest due for a term between 181 and 360 days is subject to a 20% rate. Additionally, interest due for a period between 361 and 720 days is subject to a 17.5% withholding tax rate, while interest due for a term greater than 720 days is subject to a 15% rate.
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Latest Update: November 2023