Federal Taxes Applicable to Brazilian Companies

There are two federal taxes commonly levied on Brazilian legal entities. The first is the Imposto sobre a Renda das Pessoas Jurídicas (IRPJ). The second is the Contribuição Social sobre o Lucro Líquido (CSLL).

The IRPJ is similar to the US income tax. The CSLL, on the other hand, is a contribution similar to social security. Both amounts are charged on a company’s profits.

So how are these taxes calculated? First, you must check your company’s tax regime.

With both the Lucro Real and Lucro Presumido regimes, the general rate is 15% for the IRPJ and 9% for the CSLL. For the IRPJ, an additional 10% is charged on the portion of profits that exceeds R$20,000 per month. While the CSLL has no additional percentage, the rate for financial institutions jumps to 15%.

For companies under the SIMPLES regime, these taxes are already included in the fixed rate set for each business activity.

There are also cases where, independent of the tax regime adopted, the entity is exempt. For example, a nonprofit would be exempt from paying these taxes.

Finally, the payment can be made on a monthly, quarterly, or annual basis. And as to the IRPJ, there is a declaration that must be filed with the tax authority (Receita Federal).

We strongly encourage you to seek a tax advisor for both tax planning and tax filing purposes. You’ll need to understand not only the federal taxes highlighted here but also the impact of local and state taxes.