6. Taxes: Brazil

Brazil's consumption tax reform: IBS, CBS and IS timelineConstitutional Amendment 132/2023 replaces PIS, COFINS, IPI, ICMS and ISS with a dual VAT: the federal CBS and the subnational IBS, plus a federal selective tax (IS). 2026 is a test year at 0.9% CBS a
Brazil's double tax treatiesBrazil's treaty network is narrower than most large economies. The Receita Federal index lists 39 jurisdictions, one of which, Germany, has had no treaty effect since 1 January 2006. There is no incom
Corporate income tax in Brazil: IRPJ and CSLLBrazilian companies pay two federal taxes on profit: IRPJ at 15% plus a 10% surcharge on profit above BRL 20,000 a month, and CSLL, normally 9%. The combined headline rate for a non-financial company
Customs duties and import taxes in BrazilImports into Brazil bear import duty (II) at the Mercosur Common External Tariff rate for the product's NCM code, plus IPI, PIS and COFINS import and state ICMS. The II base is the customs value under
Dividend taxation in Brazil from 2026Law 15,270/2025 ended thirty years of fully exempt dividends. From 1 January 2026, dividends remitted abroad bear 10% withholding, and resident individuals suffer 10% withholding when one company pays
Federal tax audits and disputes in Brazil: DRJ and CARFFederal tax assessments are challenged first before the Receita Federal's judgment offices (DRJ) and then on appeal before CARF, a joint body of tax authority and taxpayer representatives. Since Janua
ICMS: Brazil's state VAT on goods, transport and communicationsICMS is a state level VAT on goods, interstate and intermunicipal transport and communications, set by each of the 27 states within national rules. Interstate rates are fixed by the Senate at 12% or 7
ISS: municipal tax on services in BrazilISS is a municipal tax on services listed in the annex to Complementary Law 116/2003. Each municipality sets its rate between a 2% floor and a 5% ceiling. Exports of services are exempt when the resul
Interest on equity (JCP) in BrazilJuros sobre capital próprio (JCP) let a Brazilian company pay shareholders a deductible return on equity, capped at the long term rate TJLP applied to specified equity accounts. The deduction saves up
PIS and COFINS: Brazil's federal turnover contributionsPIS and COFINS are federal contributions on gross revenue. In the non-cumulative regime, mandatory for actual profit companies, rates are 1.65% and 7.6% (9.25% combined) with input credits; in the cum
Payroll taxes in BrazilEmployers pay 20% social security (INSS) on total payroll, plus a 1% to 3% occupational risk contribution (RAT) and an 8% FGTS deposit for each employee, before third party contributions. Sectors that
Tax incentives in BrazilBrazil's main federal incentives are the 75% IRPJ reduction for projects in the SUDENE and SUDAM regions, the Lei do Bem R&D deductions, and the Manaus Free Trade Zone. From 2026, Complementary Law 22
Tax loss carryforward in BrazilBrazil lets companies carry forward IRPJ tax losses and negative CSLL bases with no time limit, but each year's offset is capped at 30% of adjusted profit. There is no carryback. Losses are forfeited
Thin capitalization rules in BrazilInterest paid to related parties abroad is deductible only if related party debt does not exceed twice the lender's equity interest, or twice the borrower's equity for lenders without a stake, and twi
Transfer pricing in Brazil: the 2024 arm's length regimeSince 1 January 2024 Brazil applies the arm's length principle under Law 14,596/2023, replacing its old fixed margin system and aligning with the OECD approach. Controlled transactions between related
Withholding tax on remittances abroad from BrazilPayments from Brazil to non-residents are generally subject to 15% income tax withholding, rising to 25% for beneficiaries in low tax jurisdictions and for non-technical services. Royalties and techni

Related: Brazil country profile · live dashboard · central bank and release calendar · our posts on X · where Argentina is involved, see The Argentine Thread guide