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Brazil Import Regs.: Taxes on Software

Come here to discuss the Brazil's standards of various industry, products registration and import regulations as well as tariff information.

Brazil Import Regs.: Taxes on Software

Postby bridgat » Mon Nov 17, 2008 3:40 pm

The ICMS tax (similar to a VAT tax) is paid on the CIF+duty+Misc. taxes (including the value of the medium). The ICMS tax is paid at the border. The documention designates the State to which the tax is paid. The ICMS tax is levied on intra-state transactions with appropriate credits assessed.

Under licensing arrangements, federal withholding taxes are applied in Brazil - 15% for royalty remittances plus a CIDE 10% surcharge on overseas transfers. In addition, the PIS/COFINS taxes are now applied to the total value of the transaction, but a reduced rate of 3.65% applies.

Under Law 10.332 of December 19, 2001 and Law 10.168 of December 29, 2000 and subsequent modifications and implementing regulations, the GOB applies a 10% tax on services provided by foreign entities to domestic entities made through contractual arrangements. This tax, technically referred to as a "social economic development contribution" (CIDE), imposes an additional 10% surcharge on the current 15% withholding tax on technology companies' royalty remittances.

Technical services

Professional's Visa - available to individuals comign to Brazil to work for a temporary period no longer than 2 years initially, and may be renewed for an additional 2-year period. This type of Visa is available to foreign nationals who will be temporarily employed at a Brazilian company in a positio nrequiring special knowledge. The candidate shall receive at least part of his salary in Brazil. This type of Visa will also require proof that the candidate has at least two year of experience in the acitivity he will perform in Brazil, if he has a college degree, or three years of experience if he does not have a college degree. The income earned in Brazil is subject to local taxes.

Technician's Visa - Available to individuals coming to Brazil to render technicla assistance according to a technical assistance agreement executed by a foreign company an da Brazilian company.

Documentation required for working VISA:

- Work permit petition;
- Information about the company the candidate works for;
- Voucher of the payment of the individual immigration taxes - DARF
- Articles of incorporation of the petitioning institution

Internet sales and the associated contractual obligations are subject to registration requirements and also subject to the above mentioned withholding taxes.
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