Brazil

Brazil is the world’s fifth largest country. With an estimated population above 217 million, it is one of the world’s most populous countries, after China, India, the United States, Indonesia, and Pakistan.

Brazil is divided into 27 federal units (26 states and the Federal District), including Brasilia as its capital. The official language of Brazil is Portuguese, and the currency is the real (BRL).

The Brazilian economy is considered large by almost any standard. Brazil is the eighth largest economy in the world in terms of gross domestic product (GDP) derived from purchasing power parity (PPP) calculations.

Brazil has a diversified economy with strong companies in the agricultural, commodities, industrial, and service sectors; it has one of the biggest middle classes.

Recent years have been marked by significant economic and political challenges in Brazil. However, despite being considerably affected by the COVID-19 pandemic in terms of economic indicators, its economy ended 2021 on a stronger footing than expected. GDP returned to growth in the final two months of the year, even as supply shortages were still hitting manufacturers.

Brazil implemented a labour reform in 2017, as well as a social security/pension reform in late 2019. Broader tax reform has been under discussion for the last three years, and, although the last bill was not approved, a tax reform is still being contemplated and expected to be implemented in the foreseeable future.

Tax reform has been enthusiastically discussed to reform the Brazilian tax system, including direct and indirect taxes at all federate levels. On the direct tax front, a corporate income tax (CIT) reduction is expected, while a withholding tax (WHT) on dividends may be created. For indirect taxes, a more streamlined approach, consolidating the various taxes and contributions, has been approved (further comments are provided in a specific topic). Brazil has recently approved new transfer pricing rules, aligned with the Organisation for Economic Co-operation and Development (OECD) transfer pricing guidelines and, therefore, based on arm`s-length principles. 

PwC came to Brazil in 1915. We now have around 4,000 professionals in 15 offices located in almost every region of Brazil. PwC Brazil offers a network of experienced professionals with expertise in specific economic sectors of industry and accumulated knowledge of business to assist our clients grow and prosper.

PwC's awarded tax team provides tailored solutions for clients doing business in Brazil, who receive trusted advice about the complex local corporate tax environment.