Brazilian Taxes for Legal Entities 2017

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Table of Content

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Disclaimer

Every effort has been made to ensure that the information contained in this publication is correct, updated, and clearly presented. Neither the author nor the publisher is accountable for the results of actions taken on the basis of information contained in this book, or for possible errors and omissions.

This book does not render legal, accounting or tax advice. Readers must refer to specialist firms before making any decision.

The topics presented include even more exceptions than there are Federal States, which have strong prerogatives on taxation. The information is sometimes general, and some details have been deliberately omitted. When the existence of exceptions is discussed in this book, it is necessary to refer to the laws and regulations promulgated by the State or the Municipality where the establishment is located.

Introduction

Brazil with its tremendous economic potential is also a complex country where doing business can prove to be difficult. In 2016, Brazil is ranked by the IMF at the 116th position (out of a total of 189 countries) on “Ease of doing business” (rating was 120th in 2015). The assessment on taxes is even worse: 177th position.

Brazilian taxes are among the world’s most tricky. Four main explanations for this:

  • The organization is complex. It’s a FederalStateFederal Republic; outside Brasilia (Federal District), there are 26 Federal States, and inside these States there are thousands of Municipalities. They all have strong powers of taxation.
  • As a consequence of this very large number of actors on this topic, there are countless exceptions and many litigations (among other things, because States compete amongst each other to maximize budget income; and so do Municipalities).
  • Rules, methods of calculation, and above all rates of taxes are constantly changing. The Brazilian industrial lobby (among its members are many international carmakers with factories on Brazilian soil), the exchange rate of the Brazilian currency against the USD, the growth of the economy, and many other indicators are the reasons of permanent changes in taxation.
  • The Brazilian government has a protectionist policy. Taxes on importations can be very high; and on top of that, administrative procedures and the calculation of these taxes are exceptionally tricky.

« Brazilian Taxes: What you need to know » is a book outlining accounting principles and the main taxes in force in Brazil.

It contains a wealth of information, from macroeconomic elements such as debt levels, growth rates of GDP or the income tax in Brazil, to practical techniques such as methods of calculation of taxes, be they federal, state or local, or information on employer costs and Social Security contribution.

It provides numerical examples as well as cases of tax optimization.

The author, A. BLEUEZ, British and Brazilian qualified Chartered Accountant, alumnus PricewaterhouseCoopers, is now partner at BPC Partners. Based in Brazil and Europe, BPC Partners provides accounting, administration and consulting services to International Companies doing business in Brazil. Visit www.bpc-partners.com.

CHAPTER 1
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