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If you are willing to do business in Brazil, you have to know about taxation for a LLC which is the most common company structure in Brazil.

Brazil taxes corporate income on a worldwide basis. The usual rate for offshore income, from our research, and this is not personal tax advice, is 34%. The country does not have known exemptions to bring in offshore income remitted back. Corporate Income standard tax rate is 15%. A surtax of 10% is applied on income exceeding BRL 240,000. In addition, there is a 9% social contribution tax, being 20% for financial institutions. Resulting in a 34% effective tax rate. This ranks Brazil as 162nd overall with regards to corporate tax rate worldwide.

The valued added tax rate in Brazil is 20.00%, that ranks Brazil as 133rd overall with regards to VAT taxation rate internationally. In terms of other taxation, an employer will contribute 28.00% to the equivalent of a social security fund and an employee will contribute 11.00%. The overall complexity of the tax system is high. This is measured by average time to comply with a country's labor tax requirements is as it is 490hours. Contributing to this is the number of yearly labor tax payments, which is 6 in BR.

Thin cap laws are officially enacted. This refers to any type of requirements on given company with respect todebt-to-asset ratios. Dividends received from resident entities are tax-exempted. Dividends received from foreign companies are included in taxable income. Dividends are distributions of company profits, established by the board, to a class of its shareholders. Dividends can be issued as stock, cash, or property. Capital Gains are considered business ordinary income and subject to CIT standard rates. A capital gains tax is levied on the profits that a corporation or natural person realizes when he or she sells sells a capital asset for a price that is higher than the purchase price.

Dividends are not subject to withholding tax. This means that payments on dividends to non-residents are not taxed. The interest withholding tax rate is estimated at 15%. Which means that the relevant tax authorities expects LLCs to automatically withhold 15% of payments abroad for interest payments. Royalties are subject to a withholding tax of 15%. This means that resident entities should pay 15% tax on payments on royalties to non-residents. Royalty and interest payments will be taxed at a 25% wht rate when are made to residents of considered low-tax jurisdictions. Withholding taxes may be reduced on payments to residents of jurisdictions where Brazil has concluded a tax treaty with.
There is no known tax on wealth in Brazil. There are inheritance, real property and transfer taxes in Brazil. We are aware of frequently implemented credits for innovation that include tax incentives in this country.

The above is not tax or legal advice for your company situation. We can to refer you to a tax advisor in Brazil who can give you an answer. Want to work together? Click incorporate now if you are in a hurry, or press the free consultation button above.

Country details

South America
Portuguese (Brazil), Spanish (Spain), English, French (Standard)

Tax treaties

Country Type Date Signed
Turkey DTC  2010-12-16
Bermuda TIEA 2012-10-29
Argentina DTC  1980-05-17
Luxembourg DTC  1978-11-08
Spain DTC  1974-11-14
Philippines DTC  1983-09-29
Finland DTC  1996-04-02
Jersey TIEA 2013-01-28
Hungary DTC  1986-06-20
Belgium DTC  1972-06-23
Ukraine DTC  2002-01-16
Netherlands DTC  1990-03-08
Trinidad and Tobago DTC  2008-07-23
Japan DTC  1967-01-24
Czech Republic DTC  1986-08-26
Portugal DTC  2000-05-16
Canada DTC  1984-06-04
Korea, Republic of DTC  1989-03-07
Israel DTC  2002-12-12
Italy DTC  1978-10-03
France DTC  1971-09-10
Austria DTC  1975-05-24
Chile DTC  2001-04-03
Russian Federation DTC  2004-11-22
United States TIEA 2006-03-20
South Africa DTC  2003-11-08
Denmark DTC  1974-08-27
United Kingdom TIEA 2012-09-28
Peru DTC  2006-02-17
India DTC  1988-04-26
Ecuador DTC  1983-05-26
Uruguay TIEA 2012-10-23
Cayman Islands TIEA 2013-03-19
Norway DTC  1980-08-21
China DTC  1991-08-05
Venezuela DTC  2005-01-14
Mexico DTC  2003-09-25
Sweden DTC  1975-04-25
Slovakia DTC  1986-08-26
Guernsey TIEA 2013-02-06

Tax treaties Map



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