Brazil Indirect tax overview
| Tax | Why/When/for Who Calculated? | comments |
| PIS | Federeal Tax | Contribution on the Social Integration Program |
| COFINS | Federeal Tax | Social Security Financing Contribution |
| IPI | Federeal Tax | Tax on Manufactured Products, and Imported Products |
| ISS | Municipal Tax | local tax on Services of any nature, upon the commissions received. Imposto Sobre Serviço de Qualquer Natureza (ISSQN) |
| ICMS | State Tax | Tax on Distribution of Goods and Services: Sales and Movement |
| ICMS-PPB | State Tax only for intrastate operation or interstate operation for non taxpayer | Processo Produtivo Básico |
| ICMS-ST | ICMS-ST is only applicable for – NEWS PRODUCTS, and with the fiscal classification described in the internal Decree or protocols (state from/state to). -operations ICMS taxable, and customer taxpayer, except end user in the SP state (internal operation). |
WHT ICMS or ICMS taxing substitution |
| Imposto de Importação | Federal Tax – Every purchasing transaction(PO) when a product or services is imported | The importation tax is applied when we import services and products, the rate and definitions is very different depending on the description of the procurement transaction. |
| PIS RF | Federal WHT Tax – At each sales transaction these taxes (also referred as PCC WHT) needs to be calculated based on customer | Withholding on Federal tax Social contributions – On products only when the customer is federal government – On Service, depends of customer type and service type |
| COFINS RF | Federal WHT Tax – At each sales transaction these taxes (also referred as PCC WHT) needs to be calculated based on customer | Withholding on Federal tax Social contributions – On products only when the customer is federal government – On Service, depends of customer type and service type |
| CSLL RF | Federal WHT Tax – At each sales transaction these taxes (also referred as PCC WHT) needs to be calculated based on customer | Contribuição sobre Lucro Líquido (CSLL),
On September 30 2004 the Brazilian authorities issued Provisional Measure 219 (PM 219), which granted tax benefits on purchases of fixed assets. Effective as from October 1 2004, Brazilian legal entities are allowed to claim a credit for social contribution on net income (CSLL) purposes (to be offset against the CSLL liability), corresponding to 25% calculated over the book depreciation of assets acquired between October 1 2004 and December 31 2005. |
| IR RF | Federal Income tax (WHT) | On products only when the customer is federal government |
| ISS RF | Municipal Tax (WHT) | Withholding on ISS Tax |
| INSS | Federal Tax – Social Security | Cases when Lexmark Employees are deployed at Customer Site — Lexmark should calculate this tax amount(INSS) on the invoice to the customer — The Customer will use this amount and pay the Social security tax to the Brazil government instead of Lexmark — Customer will be paying Lexmark the rest of the invoice excluding INSS |
| CIDE | Federal Tax – Every sales transaction which has a Lexmark’s Intellectual property (IP) and/or Royalty involved | Contribution on Economic Activity – Overseas Remittances
Payments of royalties and fees on technical transfers and technical services by foreign persons. Rate = 10% The CIDE is assessed on remittances overseas relating to payments of copyrights, trademark and patent royalties, technical services and assistance, administrative support and related activities. As a rule, the Brazilian company figures as taxpayer of the CIDE tax, which is levied at up to 10% on the amounts remitted overseas. This contribution usually escapes the provisions set forth in the international double taxation treaties to which Brazil is a signatory. |
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