(2) Sales Tax (Tax on Operations relating to the Circulation of Merchandise and the Rendering of Interstate and Intermunicipal Transport and Communications Services - ICMS) Rate: variable depending on the type of product, in accordance with the IPI Tax Table -TIPI. The basis of calculation of the IPI on the internal market is the price of the operation (including ICMS), triggered upon the dispatch from the producer of the industrialized product. The taxes imposed on internal market operations are as follows (in the order of their imposition): This tax is calculated over the value of international maritime freight. (4) Addition to Freight for the renewal of the Merchant Marine (AFRMM) upon dispatch from the importer's premises, the price of the operation.ġ8% : normal rate adopted by the majority of the Brazilian states.
#TAXATION IN BRAZIL´S PC INDUSTRY PLUS#
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Importation operations are subject to the following taxes: We have also included a chart summarizing the total tax burden for legal entities in Brazil. For comprehension purposes we have divided the existing taxes into five different areas : Taxes on Importation, Taxes on Domestic Operations, Corporate Taxes, Individual Taxes, and Other Taxes. The system is a very complex one and includes at least fifty different types of taxes.īelow is a brief description of each tax. Such a system allows for each political body at federal, state and municipal levels to generate their own tax revenue. Although the conventional wisdom about the impact of democratization on taxation outcomes is less clear, at the very least one could certainly have predicted that similar political openings should have led to similar types of tax reforms in the two countries.Brazil's Federal Constitution of 1988 established a new Taxation System. For the first time, poor majorities have had the opportunity to express political opinions on questions of taxation in both countries.
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Finally, democratic transitions in both countries have provided openings for significant tax reform. Given the prospect of the flight of skills and capital, policy makers have been bombarded with demands for lower taxes on mobile capital and for the simplification of complex tax systems. Second, in an era of globalization, the international economy has provided strong incentives for countries to conform to global norms of tax policy and administration. First, the two countries continued to be characterized by similar levels of economic and industrial development, and given the generally strong relationship between modernization factors and patterns of tax collection, there would have been good reason to predict that their tax policies and administrative practices would increasingly resemble those of one another. Indeed, if ever there was a time when domestic and international conditions would have seemed capable of producing convergence in the trajectory of tax state building in Brazil and South Africa, the last two decades of the 20th century were such a period. Even when the most basic terms of social, political, and economic life are shaken up, certain old patterns die hard.