Brazil indirect tax compliance and rates
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Brazilian indirect tax compliance
There are detailed rules controlling the recording and processing of Brazilian transactions for indirect tax. These include guidelines on:
- Invoice requirements, including the requirement for electronic invoicing;
- Foreign currency reporting and translation;
- Export invoices;
- Language requirements;
- Credit notes and corrections; and
- What accounting records must be maintained and for how long.
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Brazilian indirect tax returns
Periodic returns must be submitted by companies registered for indirect taxes in Brazil. In general, filings are monthly.
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VAT refunds in Brazil
There is no function for the refund of VAT to foreign companies if not registered.
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Indirect tax rates in Brazil
Each of the 26 states and the Federal District set their own indirect tax rates, which range between 17% and 19%. Some examples of the ICMS standard rate are as follows:
- São Paulo, Paraná e Minas Gerais: 18%
- Rio de Janeiro: 19%
- Remaining States: 17%
- Rates of IPI range from 0 to 330%, and average around 15%. ISS standard rate ranges from 2% to 5%.
Federal VAT or IPI varies according the goods and levy, but can go as high as 300%. The city Services Tax ISS again have varying rates between 2% and 5%.
PIS and & COFINS over sales could be under two regimes:
- Cumulative method the rates are: PIS 0,65% and COFINS 3,00%;
- Non cumulative the rates are: PIS 1,65% and COFINS 7.6% respectively.
There are many variations to the rates above, including zero rating and exemptions.
Brazil VAT rates | ||
Rate | Type | Which goods or services |
17% | Standard | Standard state-level VAT or ICMS varies from 17% to 25% depending on the state and the type of goods and services |
12% | Reduced | Reduced ICMS rate on inter-state supplies |
7% | Reduced | Reduced ICMS rate on designated remote states transactions |
2-5% | Local Municipal Service Tax ISS | |
1.65-7.6% | Federal Gross Revenue Tax PIS | |
0% | ICMS rate on e-commerce |
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