Investor Presentaiton
CORPORATE LAW
BY PAULO SALVADOR RIBEIRO PERROTTI AND FERNANDO MAURO BARRUECO
BRAZIL - CANADA COMPARATIVE LAW
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of 11%, whereas self-employed workers pay 20%. In both cases, the
basis for calculation of this charge is limited to R$ 2.400,00 (adjusted
monthly as of January 2004). Corporations pay CINSS at the rate
of 20% on payments to individuals for services performed, with no
ceiling. Rate of 2% on gross revenue exclusively for companies that
provide information technology (IT), information technology and
communication (ICT), call centers and companies in the hospitality
industry and construction industry.
Contribution to intervene in the economic domain (CIDE): (I) CIDE/
Fuel is due at specific rates on import and trade in the domestic fuel
market; and (II) CIDE/Remittances is due on remittances to foreign
individuals for royalties or technology transfers. The rate is 10%.
Alternative Tax Regime
There are three options for tax assessment in Brazil:
Actual profit: This is the general (or default) format to assess and
pay taxes in Brazil. It goes along the basic lines of taxation in other
countries. The main taxes to be paid by companies are: Taxes applied
when an invoice is issued (PIS and COFINS) and taxes that are applied
on the net income such as IRPJ (tax over net income) and CSLL (social
contribution over net income). In addition there are taxes over the
payroll that concern the employer's part of social security (public
health services and pension programs).
Assumed Profit: This is a simplified form of assessing taxes and
bookkeeping which can be applied by companies.
Simplified Taxation System: Intended for small companies, with
just a single tax (called simplified taxation system). It applies to
companies with less than R$ 3.6 M in revenues. ■
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