Brazil

Social security contributions

All employees, self-employed individuals, and employers in Brazil are required to make contributions to the social security system.

Social security contributions due by employees are payable monthly, on Brazilian-source salary income, limited to a ceiling cap each month, according to the rates table, as outlined below.

Employees are subject to the payment of monthly social security contributions based on the following progressive rates starting January 2024 (Ordinance MPS/MF 2/2024):

Social security contributions due by the employer are calculated considering a flat rate of 20% or 22.5%, depending on the industry's sector. In addition to the referred social security contribution, additional social charges are due by the employer, whose rate will depend on its economic activities.

Social security payable by self-employed individuals may be 5%, 11%, or 20% of the ceiling contribution salary, depending on specific conditions of the individual and of the services rendered.

Corporate social contributions - Specific sectors

Companies that provide certain services (information technology; communication companies; hotel services; integrated circuits design or development; transport companies; aircraft, engines, components, and related equipment maintenance and repair; navigation support maritime, port support, and others) and specific industrial sectors (clothing, leather, fur, textiles, metal products, buttons, and others) may pay social security contributions based on the gross revenue (CPRB) instead of payroll (SCOP). The tax rates will depend on the respective sector and may reach up to 4.5% levied on the company's net revenue (the precise rate depends on the type of product manufactured and type of services provided by the company).

Law 14,973/2024 established the gradual re-taxation of the payroll for such taxpayers during the period from 2025 to 2027, which will consist of the gradual reduction of the CPRB rate while the rate of the SCOP will be gradually re established, as per the table below:

Capital gains tax

There are certain exemptions applicable that must be observed. The gain is calculated on the excess of the sale price over the cost of the asset sold and the portion of capital gain that exceeds BRL 5 million is taxed at higher rates, ranging from 17.5% to the maximum rate of 22.5%, the latter applicable to the portion of capital gain that exceeds BRL 30 million.

Income from financial investments abroad and profits earned by qualified controlled entities domiciled abroad are subject to annual taxation by the Personal Income Tax at a flat rate of 15% starting January 1, 2024, separately from other income and capital gains, with no deduction being applied to the tax base. Capital gains arising from the disposal of other types of assets located abroad are subject to the same rules applicable to capital gains on the disposal of assets located in Brazil.

Non-residents are only subject to capital gains tax resulting from the sale of assets located in Brazil.

The gain is calculated on the excess of the sale price over the cost of the asset sold and the portion of capital gain that exceeds BRL 5 million will be taxed at higher rates, ranging from 17.5% to the maximum rate of 22.5%, the latter applicable to the portion of capital gain that exceeds BRL 30 million.

Capital gains tax on Brazilian Variable Incomes

Stocks sold in Brazilian markets or in the over the counter (OTC) market are subject to equity income taxation. Gains on the sale of stocks in the Brazilian stock exchange will be treated as equity income and will be taxed at a flat 15% rate, except for day-trade transactions which are taxed at 20%. There are also certain exemptions applicable that must be observed.

Non-resident investors in equity instruments traded on the Brazilian stock exchange may be taxed at a zero rate under certain conditions.

Net wealth/worth taxes

There are no net wealth/worth taxes in Brazil.

Inheritance, estate, and gift taxes

Donations, gifts, and inheritances are liable to taxation in Brazil via the Tax on Inheritances and Gifts (Imposto sobre Transmissão Causa Mortis e Doações or ITCMD). This is a state tax, which means its regime may vary from state to state in Brazil.

As a general rule, the ITCMD tax rate can reach up to 8%, calculated on the value of the assets or rights, or on the amount being transferred to someone.

Property taxes

Imposto Predial e Territorial Urbano (IPTU) is a property tax levied annually based on the fair market value of property in urban areas at rates that generally vary according to the municipality and location of the property. In the municipality of São Paulo, the basic IPTU rate is 1% for residential properties or 1.5% for commercial properties (both rates may be increased or decreased according to the market value of the property).

Imposto de Transmissão de Bens Imóveis Inter Vivos (ITBI) is a property tax levied at the transfer of immovable property, with rates also varying based on the municipality where the property is located. The ITBI of up to 3% is payable by the acquirer on sales or transfers of real estate.

Luxury and excise taxes

There are no luxury and excise taxes in Brazil.