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Brazil - TAXES ACCOUNTING |
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Corporate tax
Tax rate for resident companies |
The tax rate is 15%, completed with an additional tax of 10% on profits exceeding 240,000 R$. The Social Contribution is another federal tax calculated on net income. This rate is 9% computed on an annual or quaterly basis. Companies can benefit from reductions or exemptions when they are situated in less developed trades-zones,
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Taxe rate on long-term capital gains |
Capital gains tax rate is the same as corporation tax rate.
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System governing groups of companies and dividends paid by subsidiaries to their parent companies |
Dividends paid to residents or nonresidents are not subjected to a payment at the source,
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Tax rate on branches |
In Brazil, the corporate tax is levied on branches,
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Income tax
Fiscal year |
The fiscal year begins on January 1st and ends on December 31st of the same year.
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Income tax rate |
The rate is progressive from 0 to 27.5% and shared out into 3 brackets, It applies to monthly incomes,
| Lower than 12 696 R$ | 0% | | 12 696 R$ - 25 380R$ | 15% | | Beyond 25 380 R$ | 27.5% |
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Tax deductions or
other allowances |
There are several types of reductions or of dejections applying in Brazil:
- Living allowances,
- Social Security rates,
- Fixed deduction of 1 080 BRL for single people,
- Donations, certain school fees, medical expenses etc, (20% maximum of the global annual income),
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VAT rates
Standard rates |
2 types of value-added taxes exist in Brazil:
- Excise Tax (IPI): This federal value-added is levied on nearly all sales and transfers of products manufactured in or imported into Brazil, depending on the degree of necessity. IPI rates vary normally around 10% to 15%, but in certain cases range over 300%.
- Value-Added Sales and Services Tax (ICMS): this state tax is levied on sales or movement of goods, freight, transportation, communications services and eletric energy. Intrastate transactions are taxed at 18%, interstate transactions 7% to 12%, and most imports 18% to 25%. Communication services are taxed at 13% to 35%.
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Reduced rates |
no
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Other important taxes
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Name of tax |
Rate |
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Social Security
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Tax paid by the employers which affects 25 to 28% of the salary,
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Accounting
Introduction
The accounting practices in Brazil are inspired by the American model. Indeed, the Brazilian accounting standards are the traduction of the "American Institute of Certified Public Accountants ' Statement of Auditing Standards".
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Obligations and publications
According to the American model, financial statements must contain at least: a variation table of constant capital out of reserve account and extension account, a table of cash flows, appendices.
Trading companies have to publish annually a balance sheet, a profit and loss account and all information necessary for the understanding of the company's financial health. These documents must be controlled within 60 days preceding the annual meeting of shareholders.
Certification and auditing
The financial statements must be controlled by an independent auditor registered to the "Securities and Exchange Commission" or the "Instituto Brasileiro de Contadores". About half of the audits realized in Brazil are made by international companies of audit.
The current tendency is an increase of the number of the audited companies including those which are not forced to. The qualitative security emanating from a certification represents a not inconsiderable proof for Brazilian companies.
Professionals and representative organizations
The "Conselho Federal de Contabilidade".
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Export Entreprises SA ©, All rights reserved
Last modified in
January 2003
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