Accounting and legal

Accounting and tax

Corporate taxation in Brazil Tax legislation in Brazil is complex and high taxes are levied by three tax collection levels: federal, state and municipal governments

  1. Both resident and non-resident corporations are subject to an average corporate tax rate of 34% depending on turnover size;
  2. There are two types of taxes based off of gross revenue: i) a federal tax levied on domestic and foreign manufactured products (PIS) levied at a rate of 1.65%, and ii) a mandatory social security contribution (COFINS) levied at a rate of 7.6%;
  3. There are no withholding taxes on dividend distributions to non-residents whether corporate or individual. Interest and royalties paid to a non-resident are subject to a withholding tax of 15% unless they are reduced under a tax treaty. The withholding tax rate is 25% of payments to tax haven companies;
  4. There are two types of Value-added Taxes (VAT): i) a federal VAT on the production and importation of domestic or foreign manufactured products (IPI), levied at a rate of 20% and ii) a state VAT on goods and certain services (ICMS), levied at a rate of between 7 to 25%, depending on the state;
  5. Companies are required to keep accounting records, the taxable income control register and supporting documentation and calculations, in order to demonstrate the amount of tax due;
  6. The Brazil tax year is the calendar year. Companies must file a paper annual tax return before the last working day of April each year. Tax return extensions are not possible;
  7. Brazil has signed bilateral taxations treaties with 28 countries including Argentina, Canada, Chile, China, India, Japan, Korea, Philippines and South Africa;
  8. Healy Consultants Compliance Department assists our Clients to efficiently and completely discharge the annual accounting obligations of their Brazil company through the following: i) documenting and implementing accounting procedures ii) implementing financial accounting software iii) preparation of financial accounting records and iv) preparing forecasts, budgets and sensitivity analysis to better manage financial obligations and ease the process of reporting to the Brazil accounting authorities;
  9. For an active trading company, the accounting and tax fees are an estimate of Healy Consultants fees to efficiently and effectively discharge your annual company accounting and tax obligations. Following receipt of a set of draft accounting numbers from your company, Healy Consultants will more accurately advise accounting and tax fees. For a dormant company, Healy Consultants fees are only US$950;
  10. Monthly Government tax reporting obligations include i) payroll reporting and ii) IPI federal VAT filing and iii) ICMS states VAT filing to the Brazilian Government. If you need our help, Healy Consultants can complete monthly reporting for our Client for a monthly fee;
  11. All Brazil companies are subject to i) corporate income tax ii) value-added tax and iii) Social Security contributions. They also have to withhold personal income tax paid by their employees;
  12. It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.

Legal and compliance

  1. According to the Companies Act, a Brazil company must have at least one director and two shareholders of any nationality;
  2. There is no minimum share capital requirement for a Brazilian LLC;
  3. Every company is mandated to lodge annual returns verifying relevant details of the company for the public register including names and addresses of all directors, address of principal place of business and details of shareholders and their shareholdings;
  4. A private Brazil company is required to maintain a local registered address;
  5. Each foreign company must appoint a Brazil legal representative to act as a sponsor. This representative can be a Brazilian or a permanent resident;
  6. Not all sectors in Brazil allow 100 percent foreign ownership. Foreign ownership is restricted in the health services, postal services, aerospace and nuclear energy industries;
  7. Employers in Brazil will likely need to provide additional benefits for employees. These include health benefits, meal allowance, life insurance, dental plan, employee loans, pension funds, medical checkups, prescription drug benefits;
  8. Public companies in Brazil must publish annual financial statements in a national newspaper, though they need not be audited. Brazilian LLCs are not required to publish annual financial statements;
  9. Foreign investors are protected by Brazilian law and specific organisations such as i) The Brazilian Export and Investment Promotion Agency (Apex), ii) The National Financial and Capital Markets Association (Anbima), iii) Cetip, iv) Market Information Organization Board (Codim) or v) Brazilian Institute for Investor Relations (IBRI);
  10. For the process of company de-registration, the company will be required to maintain a resident company secretary and a legal registered office in Brazil. Healy Consultants fee to project manage company de-registration is US$1,450;
  11. In accordance with the Brazil Company Law each Brazil entity must have at least one individual representative ordinarily resident in Brazil. Most of our clients appoint one of the local staff members as registered local representative. If required, Healy Consultants will be pleased to provide your firm with a professional nominee director in Brazil. Our fee amounts to US$14,500 per annum.

Contact us

For additional information on our accounting and legal services in Brazil, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Ms. Chrissi Zamora, directly:
client relationship officer - Chrissi