WHAT ARE AND HOW IS THE PAYMENT OF TAXES IN BRAZIL?Odenir Campos
In Brazil, specifically for companies, taxes vary according to the tax rate of each: National Simple, Presumed Profit or Real Profit.
The main taxes paid by companies are: ICMS, ISS, PIS, COFINS, CSLL and IRPJ. Still on how these taxes are charged we can classify them as direct and indirect:
Direct taxes are those paid on the consumption and assets of each citizen. Although they do not weigh so heavily in their pockets, they are the most well-known contributors:
1. Personal Income Tax (IRPF): it is levied on the taxable income declared by the citizen. The rate is calculated proportionally according to the declared value, ranging from 7.5 to 27.5%.
2. IPVA (Property Tax on Motor Vehicles): charged annually to all vehicle owners, the percentage is differentiated in each state. The rate can vary between 1% and 4% of the value of the vehicle.
3. IPTU (Property and Urban Property Tax): annual fee, due by all property owners, both in the rural area and in the urban area. The amount, which can be paid in cash or in installments, is calculated based on the real value of the property (estimate of value fixed by the Government).
Indirect taxes are the ones that weigh the most in the domestic budget. Embedded in the final values of the products and services, it is almost impossible to get rid of the charges:
1. ICMS (Tax on Circulation of Goods and Services): is charged on the movement of goods or other services. The tax rate is applied by each state, varying according to the level of essentiality of the service or merchandise. The average applied is 18%.
2. IPI (Industrialized Products Tax): IPI became better known to the general public due to the various campaigns of the Federal Government and private companies, aimed at reducing the tax, especially on white goods (stoves, refrigerators, etc.) And automobiles. The value of the tax depends on the product. Through the website of the IRS you can consult the rate table.
3. ISS (Tax on Services): this tax is charged under the provision of services, regardless of the type of market. Charged by the municipality, the amount usually corresponds to 5% of the service.
4. IOF (Tax on Financial Transactions): The IOF tax is levied on all financial transactions, whether performed by credit card companies or financial institutions. In the case of the cards, the collection occurs, one of the times, when the consumer makes payments of accounts and bank cards for the credit function.
Although Brazil is considered one of the countries where taxes are most paid, it is essential to have a system of products and services control in which these taxes are classified, embedded in the price, considered in order to estimate the real cost of these products and services.
It is advisable for managers to perform calculations, aiming at subsidies for decision making by the form of taxation, estimating revenues and costs, based on annual budget or historical book values, duly adjusted in realistic expectations.
The tax planning that will indicate the best form of taxation. Some activities are not allowed option by National Simples, other yes. That is why it is not essential to take this planning into account even before the start of business activities.
ODENIR J CAMPOS