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Doing Business in Brazil
by the difference between company’s revenues and its costs and expenses, as adjusted by the Brazilian statutory rules.
• The company may opt to calculate the IRPJ on a quarter or annual basis. IRPJ is computed at
15% rate on the adjusted net income added by a 10% surtax on net income exceeding R$ 60,000.00 per quarter or R$ 240,000.00 per year.
• Presumed Profit: Available for companies with revenues lower than R$ 78 million in the previous fiscal year, except for certain activities (e.g. financial institutions) or conditions (e.g. companies which have profits, capital gains or other earnings originated abroad).
Under this methodology, the tax basis corresponds to a different percentage of the gross revenue. For most industry and commerce activities, the tax basis corresponds to 8% of gross revenues, but for services companies, the tax basis is 32% of the gross revenue.
The IRPJ is calculated on a quarterly basis, levied at a 15% rate, added by a 10% surtax levied on the income exceeding R$ 60,000.00 per quarter.
In addition to the IRPJ, the Brazilian companies must also pay the Social Contribution on Net Profit (CSLL). The CSLL is, in fact, a corporate income tax surcharge, applying at the rate of 9% for most companies. Similar to IRPJ, CSLL tax basis is the net income and taxpayers may opt
to calculate CSSL on a quarterly or annual basis.
Thus, Brazilian companies should consider the total corporate income taxes rate as 34% (15% IRPJ + 10% additional rate and 9% for CSLL).
2. Transactional Taxes
2.1. Federal Welfare Contribu- tions (PIS and COFINS)
Federal Welfare Contributions (PIS and COFINS) are levied on the company’s gross revenues. Also for PIS and COFINS there are two main methodologies: the non-cumulative and the cumulative regimes.
The non- cumulative regime applies to most companies in Brazil, except for certain companies
or activities provided by law.
The non-cumulative regime applies to most companies in Brazil, except for certain companies or activities provided by law. The overall rate is 9.25% (1.65% for PIS and 7.6% for COFINS) and companies are able to
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