The current Federal Constitution, which was promulgated on October 5, 1988, allocates taxing power between the Union, the States and Municipalities, granting to each of them the power to levy taxes.
Taxes in Brazil are divided into pure taxes, betterment fees, social contributions, contributions and compulsory loans. Each level of government is allotted specific taxes which are specified in the Constitution.
In brief, the Federal Government is allocated taxes on Income and Capital Gains, Industrialized Goods, Imports and Exports, Financial Operations, as well as social contributions, in general.
States and the Federal District are allowed to levy ICMS (similar to VAT), imposed, mainly, on the sales of products.
The Municipalities and the Federal District are given the power to impose taxes on urban property (IPTU) and services (ISS).
A Brazilian Tax Lawyer will provide the foreign investor with counseling regarding the specific taxes applicable to the foreign investor´s sphere of business activity. Subsequently, an accounting firm can provide advice about practical and operational fiscal measures affecting the client´s activities.
For more detailed information on Brazilian Taxation, please contact us.
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