Taxes are one of the most significant factors in choosing the market entry strategy. It is crucial to study the taxes at a very early stage when entering the market as it has a high impact on the planned pricing, distribution structure and on the entire strategic approach to the market.
There are 90 different taxes, duties and contributions that are currently charged in Brazil, Some are really specific and some almost unknown.
The main ones, however, are commonly known by anyone doing business in the country.
Taxes in Brazil can be divided into various categories, based on different governmental sphere:
Federal taxes, regulated and collected by the Federal government
State taxes, regulated and collected by each state’s government
Municipality taxes, regulated and collected per each municipality’s government
Most common Brazilian taxes:
IRPJ (imposto de renda pessoa jurídica) – income tax, the brazilian corporate tax.
IRF - withholding income tax
CSL - social contribution on net profit
PIS-Cofins - profit participation program contribution and social security financing contribution
IPI - tax on manufactured of products
CIDE - contribution on economic activities
ITR (imposto territorial rural) - country property tax
IOF - tax charged on financial transactions, such as currency exchange, insurance and operations involving credit
ICMS - tax on distribution of goods and services
SOURCE: DOING BUSINESS 2011, WORLD BANK