{"id":21815,"date":"2019-10-23T17:35:15","date_gmt":"2019-10-23T20:35:15","guid":{"rendered":"https:\/\/www.ccbc.org.br\/publicacoes\/uncategorized\/7-tips-not-to-get-lost-in-brazilian-taxation\/"},"modified":"2023-02-09T09:08:38","modified_gmt":"2023-02-09T12:08:38","slug":"7-tips-not-to-get-lost-in-brazilian-taxation","status":"publish","type":"post","link":"https:\/\/www.ccbc.org.br\/en\/publicacoes\/artigos-ccbc-en\/7-tips-not-to-get-lost-in-brazilian-taxation\/","title":{"rendered":"7 tips not to get lost in Brazilian taxation"},"content":{"rendered":"

Paying attention to some important points can help entrepreneurs and investors interested in operating in Brazil<\/em><\/p>\n

By Estela Cangerana<\/p>\n

Indeed, Brazil is a country with a quite complex and unique tax system. But it is also one of the ten largest economies in the world, with a consumer market of over 200 million people and room for competition in various sectors. Additionally, efforts are being made to improve business environment, which has even reflected the country’s ranking in the World Bank’s Doing Business global ranking.<\/p>\n

Brazil increased 16 points from 2018 to 2019, reaching the 109th position amongst 190 nations, with significant advances in items such as business start-ups and international trade. Although that is not yet a good rating, it is the best ever achieved by the country. It is expected that, by the 2020 edition, it will be even more positive, reaching 50th place in 2022 (Brazilian government\u2019s current goal).<\/p>\n

\u201cIn fact, Brazil is one of the most complicated countries in the world as regards tax matters, but that does not make it impossible to do good business. The important thing is to measure the return you can have on each investment,\u201d says accountant Arnaud Bleuez, partner at consulting firm BPC Partners and author of the book \u201cBrazilian Taxes for Legal Entities: what you need to know\u201d. For those interested in the Brazilian market, the expert listed some basic tips to plan well for the country’s system:<\/p>\n

1) Keep complexity in mind.<\/strong>
\n\u201cBrazil has created its own tax system, different from other countries, and some things may be difficult for a foreigner to understand,\u201d he explains. He points out that it is important to be aware of the almost 6,000 actors in the Brazilian tax scenario, including the federal level, the 27 states and more than 5,500 municipalities. \u201cThis could mean, for example, 27 different tax rates for the same product.\u201d Therefore, it is critical to be well-informed about what applies to your specific case.<\/p>\n

2) Choose well your tax regime.<\/strong>
\nIn Brazil, there are two possible regimes for international companies: taxable income or presumptive income, and the choice for each one is made every year. “It is a very important decision because it has the potential impact of losing or making money at the end of the fiscal year,” says the expert. The taxable income scheme (revenue minus net income payment expenses) is known outside Brazil. But in the presumptive income, the tax base does not refer to the net profit ascertained at the end, but to a percentage of the gross revenue. \u201cIf the profitability is very good, the presumptive income regime is the best option\u201d, he explains.<\/p>\n

3) Pay attention to the type of activity to be performed.<\/strong>
\nIndustry, sales or services \u2013 taxation is distinct for each of the three branches, with specific obligations.<\/p>\n

4) Research on possible differences within your product specificity.<\/strong>
\nBleuez warns that taxation does not change only due to the state or the branch of business; there may be differences according to the type of product. Obligations such as IPI (Excise Tax \u2013 on Manufactured Products) or ICMS (State Goods and Services Tax) may vary by commodity classification. \u201cStill and sparkling water, for example, are subject to different taxes, as do the various types of cheese,\u201d he notes.<\/p>\n

5) Know the difference of speaking in gross or net numbers.<\/strong>
\nThis is a fundamental difference that impacts the outcome. In Brazil, the values are informed with taxes embedded, while in the rest of the world they are net (without taxes). That is, if the total value is 120 and the tax rate is 20%, that means that abroad the calculation will be 100 + 20% = 120, and in Brazil it will be 120 – 20% = 96. Therefore, abroad the price without tax will be 100 and in Brazil, 96.<\/p>\n

6) Learn to live with instabilities.<\/strong>
\n\u201cYou have to be prepared for changes in the rules. If today is one way, tomorrow may be another completely different.\u201d Again, one must always be aware of possible changes and be well-informed before doing anything.<\/p>\n

7) Count on the support of a specialist in Brazil.<\/strong>
\nIt is not just for convenience, but a real necessity. The complexity and instability of Brazilian taxation calls for the action of an experienced professional in the market, who is able to explain the local peculiarities to the parent company, as well as advise on the best tax planning strategies.<\/p>\n","protected":false},"excerpt":{"rendered":"

Paying attention to some important points can help entrepreneurs and investors interested in operating in Brazil By Estela Cangerana Indeed, Brazil is a country with a quite complex and unique tax system. But it is also one of the ten largest economies in the world, with a consumer market of over 200 million people and […]<\/p>\n","protected":false},"author":20,"featured_media":21972,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[118],"tags":[],"class_list":["post-21815","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-artigos-ccbc-en"],"cp_meta_data":{"_wpml_word_count":["{\"total\":0,\"to_translate\":{\"en\":772,\"fr\":772,\"pt-br\":772,\"zu\":772}}"],"_alp_processed":["1675944518"],"_wpml_media_duplicate":["1"],"_wpml_media_featured":["1"],"_et_pb_side_nav":["off"],"_et_pb_post_hide_nav":["default"],"_et_pb_show_title":["on"],"_et_pb_use_builder":[""],"_et_pb_old_content":[""],"_et_pb_ab_stats_refresh_interval":["hourly"],"_et_pb_enable_shortcode_tracking":[""],"_et_pb_custom_css":[""],"_et_post_bg_color":["#ffffff"],"_et_post_bg_layout":["light"],"_top_nav_excluded":[""],"_cms_nav_minihome":[""],"_thumbnail_id":["21972"],"_et_pb_page_layout":["et_no_sidebar"],"_et_builder_dynamic_assets_loading_attr_threshold":["2"],"_encloseme":["1"],"_wpml_media_has_media":["1"],"_yoast_wpseo_primary_category":["52"],"_last_translation_edit_mode":["translation-editor"]},"acf":[],"_links":{"self":[{"href":"https:\/\/www.ccbc.org.br\/en\/wp-json\/wp\/v2\/posts\/21815"}],"collection":[{"href":"https:\/\/www.ccbc.org.br\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ccbc.org.br\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ccbc.org.br\/en\/wp-json\/wp\/v2\/users\/20"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ccbc.org.br\/en\/wp-json\/wp\/v2\/comments?post=21815"}],"version-history":[{"count":0,"href":"https:\/\/www.ccbc.org.br\/en\/wp-json\/wp\/v2\/posts\/21815\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.ccbc.org.br\/en\/wp-json\/wp\/v2\/media\/21972"}],"wp:attachment":[{"href":"https:\/\/www.ccbc.org.br\/en\/wp-json\/wp\/v2\/media?parent=21815"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ccbc.org.br\/en\/wp-json\/wp\/v2\/categories?post=21815"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ccbc.org.br\/en\/wp-json\/wp\/v2\/tags?post=21815"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}