Tech tax rates in Brazil
Here’s a brief overview of the key Brazilian tax obligations IT businesses and professionals need to consider:
Federal personal income tax (IRPF - Imposto de Renda de Pessoa Física)
Progressive tax on individuals ranges from 7.5% to 27.5%.
Federal corporate tax (IRPJ - Imposto de Renda de Pessoa Jurídica ; CSLL- Contribuição Social sobre o Lucro Líquido)
Combined corporate tax is 34% (25% IRPJ + 9% CSLL).
Tax on gross revenue (PIS - Programa de Integração Social; COFINS - Contribuição para o Financiamento da Seguridade Social)
3.65% (cumulative) or 9.25% (non-cumulative). Applies to software, SaaS, and IT services.
Municipal service tax (ISS - Imposto Sobre Serviços)
Rates vary by city, typically ranging from 2% to 5%, applied to IT services.
State VAT (ICMS - Imposto sobre Circulação de Mercadorias e Serviços)
State tax on goods and some services, including software licenses and cloud services ranging 12% - 18%, varies by state.
Employer social contributions (INSS)
Employer's share of social security – 20%.
Employee payroll tax (INSS)
7.5% – 14% deducted from salary based on income bracket.
Unemployment fund (FGTS - Fundo de Garantia do Tempo de Serviço)
Employer’s contribution to severance fund – 8%.
Withholding tax on IT services (IRRF - Imposto de Renda Retido na Fonte)
Provided by non-residents, typically 15%.
Simplified tax regime for small IT businesses (Simples Nacional)
Revenues up to R$4.8 million/year. Tax rates range from 4% to 15.5%, covering IRPJ, CSLL, PIS, COFINS, and ISS.