CLM Controller FAQ: Quick Answers to Your Questions

The import of a service or intangible good, including rights, is considered to be the supply made by a resident or domiciled abroad whose consumption takes place in the country (Brazil), even if the supply itself was made abroad.

Consumption of intangible goods and services is considered to be the use, exploitation, enjoyment or access.

The calculation basis is the value of the transaction, and the IBS and CBS rates levied on each import of an intangible good or service are the same as those levied on the supply of the same intangible good or service in the country, subject to the provisions on specific tax regimes. To determine the state, district and municipal IBS rates, the place of import is the destination of the operation.

The purchaser is the IBS and CBS taxpayer when purchasing intangible goods, including rights, and services from a supplier resident or domiciled abroad. If the purchaser is resident or domiciled abroad, the recipient is the taxpayer. The supplier resident or domiciled abroad is jointly and severally liable for the payment of IBS and CBS with the taxpayer. In addition, digital platforms, even if they are based abroad, will be responsible for paying IBS and CBS on imports made through them.

The taxable event for the import of tangible goods is the entry of goods of foreign origin into national territory. For the purposes of calculating IBS and CBS, the taxable event is considered to have occurred, as a general rule, when the goods are released for consumption.

The calculation basis is the customs value plus:
1. import tax (II);
2. Selective Tax (IS);
3. Fee for using the Integrated Foreign Trade System (Siscomex);
Additional Freight for the Renewal of the Merchant Marine (AFRMM)
5. Contribution for Intervention in the Economic Domain levied on the import and sale of oil and its derivatives, natural gas and its derivatives, and ethyl alcohol fuel (Cide-Combustíveis);
6. Anti-dumping duties, countervailing duties and safeguard measures; and
7. Any other taxes, fees, contributions or duties levied on the imported goods until their release.

The Tax on Industrialized Products (IPI), the Tax on the Circulation of Goods and Services (ICMS) and the Tax on Services of Any Kind (ISS) do not form part of the IBS and CBS calculation basis.

The taxpayer of IBS and CBS on the import of tangible goods is the importer, understood as any person or entity that promotes the entry of foreign goods into national territory, and the purchaser of goods in warehouses. In the case of importation on behalf of a third party, the importer is the purchaser of the goods abroad.
Examples of those liable for IBS and CBS on importation (in lieu of the taxpayer) include the carrier (in the event of loss up to unloading), and the warehousekeeper (in the event of loss in their custody).
Examples of jointly and severally liable persons include the person who registers the import declaration in their name for goods acquired by another person, and the pre-determined ordering party.

The IBS and CBS due on the import of tangible goods must be paid until the goods are delivered for consumption, even if this occurs before the goods are released by the customs authority. The taxable person may, however, choose to pay in advance when the import declaration is registered.

Law No. 15.270 of 2025 aims to broaden the exemption range for personal income tax, institute a minimum tax on high incomes and introduce taxation on profits and dividends. The proposal seeks to make the tax system more progressive and correct distortions between labor and capital income.

The main points are the expansion of the IRPF exemption band, the creation of annual taxation of high incomes for taxpayers with incomes of more than R$ 600,000 per year and the taxation of profits and dividends paid to individuals resident in Brazil and abroad.

The expansion of the IRPF exemption bracket comes into effect from January 2026. Withholding income tax on profits and dividends also begins in January 2026. The annual high-income tax regime will apply from the 2027 financial year, referring to the 2026 calendar year.

Yes. From January 2026, the distribution of profits and dividends to individuals resident in Brazil will be subject to withholding income tax when the amounts paid by the same company to the same individual exceed R$ 50,000 in the same month.

The rate set is 10 percent, applied to the total amount of profits or dividends distributed in the month in which the limit of R$ 50,000 is exceeded.

Income tax withheld at source must be paid by the last working day of the second decimal of the month following the taxable event.

Yes. There is no withholding when the amount paid in the month is less than R$ 50,000. In addition, taxation is waived when profits are determined by December 31, 2025, the distribution has been approved by that date and payment occurs according to the schedule originally approved, which may extend to 2028.

Split Payment is a new tax collection mechanism introduced by the Tax Reform in Brazil. It works as a way of paying taxes instantly, at the time of the transaction. Instead of the tax on a sale temporarily remaining with the supplier (seller) to be paid later, the tax amount is automatically separated when the purchase is paid for and sent directly to the government. Only the net amount (without the tax) is passed on to the supplier of the good or service. This model - nicknamed “Tax Pix” - aims to simplify tax collection and prevent tax evasion by ensuring that consumption taxes are collected immediately and efficiently.

The Split Payment was introduced as part of the Tax Reform. Constitutional Amendment No. 132/2023 established the principles of the new tax system, creating the IBS (Tax on Goods and Services) and CBS (Contribution on Goods and Services) taxes, which replace current taxes (ICMS, ISS, PIS and COFINS). The obligation and operation of the Split Payment are defined in Complementary Law 214/2025, which regulates the details of this segregated payment, dealing with “collection in financial settlement”.

The tax transfer process is immediate and automated. It works in three stages: 1. Issuance of the invoice - The supplier issues the electronic invoice stating the amount of the taxes (IBS and CBS). 2. Payment by the buyer - The buyer pays for the purchase using an electronic means, such as a credit/debit card or Pix. 3. Automatic Division by the Payment System - The financial institution or fintech processing the payment identifies the data on the invoice, consults the tax authorities' system to calculate the exact amount of tax to be paid. This tax amount is then automatically withheld and transferred to the government's coffers, and only the remainder (net amount) is credited to the supplier's account.

In most electronic sales, it is the financial institution that processes the payment (such as the card acquirer or the boleto bank) that actually withholds and pays the tax. These entities are referred to as “tax payers”. They intercept the financial flow of the transaction and remit the IBS/CBS portion directly to the tax authorities. The supplier (seller) no longer collects the taxes on most of his sales; instead, he records the credit for the tax paid automatically on the invoice and will use it to write off his subsequent debts.

The legislation provides for three modalities to accommodate different situations:
1. Intelligent Split Payment (Standard): This is the automatic and integrated model, applied mainly to business-to-business (B2B) transactions. The payment systems consult the tax authorities' databases to calculate the exact amount of tax to be paid on each transaction, already taking into account the supplier's tax credits.
2. Simplified Split Payment: This is an optional regime, designed for sales to final consumers (B2C). In this case, a predefined fixed percentage of IBS and CBS is applied for that sector or type of operation, with adjustments (credit or debit) made at the end of the period.
3. Split Payment Manual: This is an exception, used when payment does not go through the electronic system, such as cash or check purchases. In these cases, the legislation allows the purchaser (buyer), who is an IBS/CBS taxpayer, to pay the taxes for that transaction directly to the government.

In these sales outside the electronic system, there is no way to segregate the tax instantly, as there is no financial intermediary to do the automatic withholding, and Split Payment does not occur. If the sale is to a final consumer (an individual), the tax levied must be calculated and collected by the supplier afterwards via normal assessment. However, if the transaction is between companies and the payment is made manually, the buyer (a taxpaying company) has the option of paying the tax directly to the tax authorities.

No. What the Split Payment changes is the way the tax is collected, making it more automatic and earlier, but not the amount of tax due. The IBS and CBS rates will be set to replace the current taxes, so the effective tax burden does not tend to change because of the mechanism.

The implementation of Split Payment will be gradual between 2026 and 2033. In 2026, the segregated payment system should begin operating in a test model, focusing on transactions with end consumers in the main electronic media. The mechanism will be expanded in the following years. The forecast is that by 2033 the Split Payment mechanism will have been fully implemented and integrated into the means of payment in a comprehensive manner.

Split payment affects cash flow because the tax is withheld immediately, which means that the company only receives the net value of the sale on the spot. This represents an anticipation of the tax payment. On the other hand, tax paid in advance generates an instant tax credit for the supplier. In addition, the law provides for the swift return of the surplus to the taxpayer, within 3 working days of the assessment, if the tax has been paid in excess of what is due.

Some sectors will be impacted before others:
* Retail and e-commerce are priorities in the initial phase, as sales to end consumers (B2C), which mostly use electronic payments, will be the system's starting point (as early as 2026).
* Final consumer service companies (such as telecommunications and private healthcare) should also get in early.
* Financial institutions and card acquirers are at the heart of the new model, as they are responsible for developing the technological infrastructure for automatic division.
* Industry and wholesale (B2B) will have to plan ahead, although Split Payment in these operations will become more present as IBS is implemented, especially after 2029.

Companies will have to adapt their billing, ERP and collection systems. The electronic invoice, for example, will contain fields linking the sale to the payment and detailing the tax for Split. Cash systems will need to integrate with payment platforms to send this information in real time.

No. The tax reform does not do away with the Presumed Profit regime. The distinction between Presumed Profit and Real Profit will remain valid, especially for calculating Corporate Income Tax (IRPJ) and Social Contribution on Net Profit (CSLL).

There will be no changes to the IRPJ and CSLL calculation basis for Presumed Profit companies. The profit presumption rules, such as 8% for commercial activities and 32% for services, remain unchanged. Constitutional Amendment 132/2023 and Complementary Law 214/2025 maintain the way IRPJ and CSLL are calculated via presumption of income.

The reform's changes focus on taxes on consumption. PIS and COFINS will be abolished and replaced by the Contribution on Goods and Services (CBS). In addition, the ICMS (state tax) and ISS (municipal tax) will be replaced by the Tax on Goods and Services (IBS).

Currently, Presumed Profit companies pay PIS and COFINS on a cumulative basis, totaling 3.65% on gross sales, with no right to tax credits. With the reform, PIS and COFINS will be replaced by CBS, which will be applied on a non-cumulative basis for all taxpayers.

CBS will have a single rate of 9.25%. The non-cumulative model means that the company will be able to deduct CBS credits on purchased inputs, as long as these inputs are linked to its core business. Unlike the current model, CBS will allow broad credit on purchases of goods, services, rents and electricity, if they are directly related to the core business.

No. Although Complementary Law 214/2025 provides that small companies, especially those in Simples Nacional, can opt for a simplified calculation system, Presumed Profit companies will not have a special or alternative cumulative system for CBS and IBS. The rules for CBS and IBS will be the same for all companies, regardless of whether they are in Real or Presumed Profit for IRPJ and CSLL purposes.

One positive point is the simplification of consumption taxes, which tends to reduce the cost of tax compliance. Another benefit is isonomy, which treats all companies equally in terms of CBS and IBS, promoting fairer competition. However, the main challenge is the real increase in the tax burden, especially for service providers who currently pay cumulative PIS/COFINS and do not take advantage of credits. Simpler service providers may suffer an increase in the tax burden, as the effective rate of CBS and IBS tends to rise.

Among the sectors most negatively affected by the Presumed Profit tax reform are unregulated services, such as consultancies, marketing agencies and software developers. These activities generally have few credit-generating inputs and could suffer a real increase in the burden from 3.65% (current PIS/COFINS) to more than 8%. On the other hand, regulated sectors such as health, education and public transport can count on discounts of up to 30% on the VAT rate (CBS + IBS).

9. The transition of the tax reform changes will be gradual.
* 2026: Start of CBS with a test rate of 0.9% and IBS with 0.1%, with a view to adaptation.
* 2027: End of PIS/COFINS and start of full CBS, with a rate of 9.25%. The IBS test rate continues.
* 2029 to 2032: Transition from ICMS and ISS to IBS, with increasing rates until they are fully applied. The current taxes will be completely abolished in 2033.

Companies must adopt a proactive stance, which includes:
* Review the cost structure and identify the potential for using credits with CBS.
* Re-evaluate the tax regime, considering possible migration to Real Profit, especially if the new system is financially beneficial.
* Adjust the pricing of services and products to anticipate the increase in the tax burden,...
* Investing in systems and training teams to ensure the correct calculation and control of credits.
* Consult tax planning specialists to put together a strategic map for the transition period.

The Sin Tax is the popular name given to the Selective Tax (IS). It is a new tax established by the Brazilian Tax Reform (Constitutional Amendment 132/2023) and regulated by Complementary Law 214/2025. The IS is a surcharge applied to products and services considered harmful to public health or the environment.

The IS is selective and extra-fiscal in nature, which means that its main purpose is not just to raise revenue, but to discourage consumption of these specific items by charging extra. The discourse behind the tax is to change consumption behaviour by penalizing products that are seen as “harmful” with a higher tax rate.

The list of products subject to excise duty is exhaustive and covers goods and activities associated with health or environmental risks. The main items that will be taxed by the IS include: tobacco products (cigarettes, cigars and other smoking products), alcoholic beverages (all beverages with an alcohol content), sugary drinks (soft drinks and other non-alcoholic beverages with added sugar), polluting motor vehicles (transport items with high emissions), mineral goods (ores in general and fossil fuels, taxed on extraction) and betting and gaming (prediction contests, lotteries and fantasy sports).

During the regulatory process, there was discussion about including ultra-processed foods high in sodium, saturated fats and sugar in the list. However, in the final text approved, ultra-processed foods (such as snacks and sausages) were left out, with the exception of sweetened drinks (soft drinks). In addition, electricity, telecommunications and general-purpose fuels such as gasoline and diesel will not be taxed by the IS.

The Selective Tax comes into force on January 1, 2027. The year 2026 will be a transition period focused on the new IBS and CBS taxes, but the IS will not be applied in the meantime. From the beginning of 2027, with the reduction of the IPI (Industrialized Products Tax) rate to zero in most cases, the effective collection of the Sin Tax begins. In practice, the IS replaces the extra-fiscal function that the IPI exercised on these specific products.

No. The Selective Tax will be a federal tax, levied only once in the chain (usually on production, extraction, import or initial marketing) and will not be levied cumulatively on other consumption taxes. Complementary Law 214/2025 established that the IS will not be part of the IBS or CBS calculation base.

Although the final rates have not yet been set, projections suggested that cigarettes and other smokeless products could have a rate of 250% on the value of the product. For soft drinks and sugary drinks, a rate of 32% on the value has been suggested. The general logic is that the more harmful the product, the higher the rate, following the principle of discouraging consumption.

The main impacts for the industries affected include increased costs and prices, which could lead to products such as alcohol and cigarettes becoming significantly more expensive for consumers and consequently reduce sales volumes. Companies may also be encouraged to review their product mix and innovate, speeding up the production of “zero sugar” versions or investing in electric and hybrid vehicles to escape taxation.

A common criticism is that, as many of these goods (such as cigarettes) have inelastic demand, consumption may not fall significantly, resulting mainly in an increase in revenue for the government, rather than a substantial improvement in public health. Another worrying side effect is the encouragement of informality and illegality. A large price differential caused by high taxes can increase the competitiveness of the illegal product, such as cigarette smuggling, harming formalized industries.

For the mining sector, the ceiling set in the complementary law was 0.25% on the gross value extracted. This rate is low because the intention in this case is more to capture part of the income from the natural resource (and compensate for the loss of IPI from the Manaus Free Trade Zone) than to totally discourage extraction. In addition, the rates vary drastically depending on the product: public health items (cigarettes, alcohol, soft drinks) tend to have very high taxes, while strategic/exportable goods (minerals, oil) have symbolic rates.

No. According to the Constitution, exports cannot be subject to this tax. Mining and oil companies will only pay IS on domestic sales.

LCI (Letra de Crédito Imobiliário) and LCA (Letra de Crédito do Agronegócio) are fixed-income securities issued by financial institutions with the aim of raising funds. The funds raised are earmarked for the real estate and agribusiness sectors respectively. By investing in an LCI or LCA, the investor is, in practice, lending money to the bank that issued the security, and in return receives interest on the amount invested.

The main attraction has been the exemption from Income Tax (IR) on income for individual investors. Thanks to this tax benefit, all income from these bills is net, which can mean that the final gain exceeds that of taxed alternatives (such as the CDB) and often the effective returns are higher than those of savings.

Yes. Just like CDBs and savings accounts, LCIs and LCAs are protected by the Credit Guarantee Fund (FGC). In the event of bankruptcy or failure of the issuing financial institution, the investor is guaranteed to receive up to R$ 250,000 per CPF and per financial institution.

LCIs and LCAs generally have low liquidity and do not allow redemption at any time, unlike savings accounts. The regulations require a minimum grace period, which is currently 12 months for LCI and 9 months for LCA. This means that, after applying, the investor will not have access to the money for at least that long. Many bills can only be redeemed at their final maturity, which is usually between 1 and 3 years after the investment, making them unsuitable for short-term needs.

Yes, legal entities (companies) can invest in LCI and LCA, but without the benefit of IR exemption. For companies, the income from these securities is taxed normally, following the same rules applicable to an equivalent CDB. Without the tax exemption, the LCI/LCA loses much of its advantage for investments by legal entities (PJ), so companies generally prefer CDBs or other products that offer more liquidity flexibility.

The tax reform proposal stipulates that, as of January 2026, LCIs and LCAs will no longer be totally exempt for individuals and will have a fixed rate of 5% of Income Tax at source on income. This change is seen as a way of reducing distortions in relation to other fixed-income investments.

Yes, it's probably still worth investing, as the 5% rate is much lower than the taxation on other products. The proposal also establishes that CDBs and other common fixed-income investments would be taxed at a unified rate of 17.5%. Therefore, paying 5% of IR on LCI/LCA versus 17.5% on CDB maintains a relevant relative tax advantage. Compared to savings, bills of credit continue to deliver much higher net returns.

SINTER (National Land Information System) is a national spatial database that centralizes and integrates cadastral, tax and georeferenced information on rural and urban properties. The CIB (Brazilian Real Estate Registry) is a single real estate registry that builds on the SINTER, assigning each property a unique identifying code, like a “property CPF”. As of 2026, the IRS will have this tool to cross-check data on tenants and landlords, with the aim of eliminating rent evasion. This integration makes inspection more effective and makes tax evasion more difficult by unifying the database of “almost all real estate” in the country.

The Federal Revenue Service will have this powerful tool for cross-checking information from 2026, in accordance with Complementary Law 214 (Tax Reform). Although the official requirement for the CIB will be in 2026, registration updates should already be carried out in 2025.

With the new law, all rental contracts must be formalized and reported to the IRS.
* Landlord: Must declare the rents received, using the “Carnê-Leão” (for individuals) on the "Taxable Income Received from Individuals" form, detailing it month by month, or the "Income from Legal Entities" form.
* Tenant: You declare how much rent you paid on the “Payments Made” form, using code 70 (Real Estate Rents), informing the CPF or CNPJ of the landlord and the total amount paid.

The SINTER and CIB systems will allow data from income tax returns to be cross-referenced with rental contracts and receipts, bank slips, financial transactions and even IPTU data. Property information will come from municipal real estate registries, the CNIR (National Rural Property Registry), registry offices and city halls. In addition, the IRS can cross-reference address data, property ownership and bank accounts.

The new legislation provides for severe fines for those who omit or incorrectly declare the amounts:
* For the Landlord: The ex-officio fine for omitting income can be up to 75% of the tax due, plus interest and correction, and may be doubled in the event of a repeat offense.
* For the Tenant: Failure to declare the rent paid may result in a fine of 20% on the amount omitted or not declared on the “Payments Made” form.

Yes. Even if there is no formal registered contract, if the occupation of the property is identified as generating income, there may be an assessment, as the Revenue Department cross-checks data such as ownership, address and bank accounts.
In addition, if the tenant “pays” the rent through improvements or renovations to the property, the IRS considers this amount to be the owner's income and it must be taxed as rent.

Real Profit is the regime in which IRPJ and CSLL are levied on the company's actual profit, after tax adjustments.
It is recommended when margins are low, costs are high or there are recurring losses. It requires strict accounting.

Companies that adopt the Real Profit system must do so:

Turnover of more than R$ 78 million in the previous year

Financial or similar institutions are

Have profits or income abroad

Use IRPJ or CSLL tax incentives

They work with factoring or securitization

Migration can take place in the middle of the year, starting from the quarter of the event.

Quarterly: definitive calculation each quarter, with limited offsetting of losses.

Annual: calculated over the entire year, with monthly payments by estimate and final adjustment in December.

The company anticipates IRPJ and CSLL monthly by estimate or trial balance.
At the end of the year, it adjusts the amount owed, paying the difference or compensating for the excess.

Real Profit requires a high level of compliance, including:

Complete bookkeeping

Annual ECD and ECF

Monthly DCTF

EFD-Contributions

eSocial and EFD-Reinf

Failures lead to high fines and the risk of inspection.

The costs involve specialized accounting, systems and internal controls.
The risks include assessments for calculation errors, disallowance of expenses and fines of up to 75% of tax.

Losses can be offset in future periods, limited to 30% of the profit for each period.
The balance is not statute-barred, but undue offsetting generates a fine.

Profits calculated up to 31/12/2025 can be distributed without IR, if approved by that date.
From 2026, dividends above R$ 50,000 per month are subject to IRRF of 10%.

Yes, as long as it's legal.
You can take advantage of deductible expenses, tax incentives, credits and special schemes.
Artificial structures or those with no economic purpose are a high risk.

PIS and Cofins will be replaced by CBS, and ICMS and ISS by IBS.
The model is now Dual VAT, with full non-cumulativity and taxation at destination.

CBS and IBS will allow broad credit on goods and services used in the activity.
Payroll does not generate credit.

2026: test year with symbolic tax rate

2027: CBS replaces PIS and Cofins

2029 to 2032: transition from ICMS and ISS to IBS

2033: new system fully in force

Companies will need to review prices, contract clauses and tax systems.
ERPs and invoice issuance must be adapted to CBS and IBS.

Simulating impacts, reviewing contracts, updating systems, training teams and monitoring regulations.
Anticipation reduces transition risks and costs.

Yes. These regimes suspend or eliminate taxes on imports linked to exports.
The main benefit is cash flow and competitiveness.

When importing, PIS and Cofins generate credit in Real Profit.
When exporting, revenue is zero-rated, maintaining the right to credits.

Common errors include incorrect tax classification, failures in special regimes, disallowance of credits and undue withholdings on remittances abroad.

Strict document control, accounting reconciliation, monitoring of special regimes and periodic audits.

When it has a physical presence, employees, local sales or recurring operations in the country.

The Brazilian subsidiary is the most common and secure structure.
Subsidiaries are bureaucratic and rare. Partnerships are for initial entry, with less control.

Dividends are exempt until 2025 and taxed from 2026 onwards.
Royalties and services are subject to IRRF, CIDE and other withholdings, as appropriate.

CNPJ, Bacen registration, full accounting, tax and labor obligations and legal representative in Brazil.

Underestimating bureaucracy, ignoring labor legislation, getting the taxation of services wrong and failing to comply locally.

Yes. It includes corporate planning, legal registration, accounting, licenses, tax systems and ongoing compliance.

Yes, especially for growing startups, companies with initial losses or foreign capital.
Allows deduction of high costs and access to incentives.

Payroll is deductible, but does not generate a credit.
Services, cloud, marketing and R&D are deductible and tend to generate credits with CBS.

Incorrect classification of income, irregular pejotization, errors in marketplaces and improper use of tax incentives.

Revenue segregation, tax automation, clear contracts, robust documentation and periodic reviews.

Compliance is mandatory, the Tax Reform requires preparation and aggressive planning generates high risk.

Tax diagnosis, expert advice, internal training and advance planning for CBS and IBS.

The process begins by defining the type of company and gathering documents from the partners. The articles of association are then registered with the Board of Trade (the business registration body for each state). After approval, the CNPJ (Cadastro Nacional da Pessoa Jurídica) is issued by the Receita Federal, which is the company's identification number
jucemg.mg.gov.br
. With the CNPJ, the company makes additional tax registrations if necessary (state and municipal) and obtains specific licenses before starting operations.

CNPJ stands for National Register of Legal Entities. It is the unique tax registration number of every company in Brazil, equivalent to a “business ID”. Without a CNPJ, a company cannot issue invoices, pay taxes or open a bank account. Every company created in Brazil receives a CNPJ when it registers with the Board of Trade, becoming formally entitled to operate.

The main types of company in Brazil are the Sociedade Limitada (LTDA) and the Sociedade Anônima (S/A). The LTDA is the most common form for foreigners: it has a memorandum of association and shareholders, with liability limited to the capital invested. The S/A (which can be open or closed) has shareholders and higher governance requirements. A subsidiary of a foreign company is another option, but it requires prior authorization from the government and compliance with specific requirements, which is why it is less common. In practice, most companies choose to open a local subsidiary (LTDA) for its simplicity and management autonomy.

Yes. Both individuals and foreign companies can be partners in Brazilian companies
jucemg.mg.gov.br
. The foreign investor must obtain a CPF (Individual Taxpayer's Registry) if he is an individual, or provide the company's documentation abroad with a sworn translation and registration to obtain an investor's CNPJ if he is a legal entity.
crumbs.co.uk
. In addition, the non-resident foreign partner must appoint a legal representative resident in Brazil, with powers to receive notices on their behalf.

The individual foreign partner must have a valid CPF (issued by the Receita Federal) and present a certified copy of their passport. If the partner is a foreign company, it is necessary to obtain a specific CNPJ for it by registering as a non-resident investor.
crumbs.co.uk
. In this case, the constitutive act of the foreign company, proof of legal existence (such as a certificate from the country of origin) and a power of attorney appointing a representative in Brazil must be presented.
crumbs.co.uk
. All documents from abroad must be apostilled or consularized and translated by a sworn translator.

The legal representative is a person resident in Brazil with powers to represent the foreign partner or company before the Brazilian authorities. The law requires any partner or company domiciled abroad to appoint a local attorney to receive subpoenas and respond to tax and legal matters on behalf of the investor
crumbs.co.uk
. In many cases, the appointed director of the company himself can play this role, as long as he is a resident. This representative ensures that the foreign investor complies with his obligations even if he is outside the country.

Yes, it is possible to establish headquarters at a tax address provided by a virtual office or coworking space. Many startups and service companies opt for this in the beginning. It is important that the location is regulated for commercial activity and can receive official correspondence. However, certain activities that are regulated or require physical premises (e.g. industries, commerce with stock) may need an appropriate real address and specific licenses. In general, for administrative activities, the virtual address is accepted as the fiscal domicile.

In most sectors there is no mandatory minimum amount of share capital - you can open a limitada with capital freely stipulated by the partners. Only a few regulated sectors (such as banks or insurance companies) require a legal minimum capital. The share capital must reflect the resources that the partners commit to investing and can be in local currency or valued assets. Although there is no general minimum contribution, a capital compatible with the activity demonstrates solvency and can be important for investor visas or obtaining credit.

Registration begins with the feasibility of the name and address on the integrated portal of the state's Board of Trade. Then the articles of association (or bylaws, in the case of an S/A) are drawn up and filed with the Board of Trade along with the partners' documentation. Once the registration has been approved, the Board of Trade notifies the Federal Revenue Service via the Redesim system, and the CNPJ is issued electronically. The process is now unified and digital in most states, reducing time. Once the CNPJ is active, the company is already listed as existing in the National Register and can carry out the next tax steps.

It depends on the activity. Companies engaged in commerce or industrialization need state registration with the Treasury Department (to pay ICMS, the tax on the movement of goods). Companies that provide services need municipal registration with the City Hall (for ISS, tax on services). Some companies may need both registrations if they operate in mixed areas. In addition, certain segments require registration with specific bodies (e.g. health surveillance, CREA for engineering, etc.). Therefore, after obtaining the CNPJ, it is necessary to register with the relevant state/municipal tax authorities before starting operations.

In addition to tax registration, many companies need a municipal operating permit, issued by the City Hall, which authorizes activity at the location indicated. Depending on the industry, specific licenses may be required: for example, health licenses (for food, cosmetics, health), environmental licenses (industries, activities with an environmental impact), Fire Department inspections (AVCB) for physical premises, among others. Sectors such as telecommunications, finance, transport and education, among others, have their own regulatory bodies that issue permits. It is essential to check your sector's requirements and obtain the permits before starting your operation to avoid bans or fines.

A subsidiary is a new Brazilian company, incorporated locally (usually as an LTDA or S/A), whose capital is controlled by the foreign investor. A branch, on the other hand, is an extension of the foreign legal entity operating in Brazil - it does not have its own legal personality and depends on authorization from the federal government to operate. Foreign branches are rare, as they require an authorizing decree and compliance with certain conditions, according to legislation. The usual alternative is to open a subsidiary (a local company), as the process is simpler and the subsidiary answers autonomously to Brazilian law, limiting risks to the assets invested locally.

Sources (Starting a business in Brazil):

Commercial Registry of the State of Minas Gerais - Request to open a company
jucemg.mg.gov.br

Migalhas (Legal article) - Participation of a foreign partner in a Brazilian company
crumbs.co.uk
crumbs.co.uk

Federal Revenue Service - Registration of non-residents (foreign CNPJ)
crumbs.co.uk

Yes. Every legal entity, regardless of size, must keep regular accounting records, in accordance with the Civil Code and commercial legislation. This means recording all financial and asset transactions and preparing annual accounting statements (balance sheet, income statement, etc.). Companies opting for Simples Nacional (small businesses) are exempt from some formal records and from submitting the Digital Accounting Bookkeeping (ECD), but they still need to have financial control and can, optionally, keep accounts.
legisweb.com.br
. Organized accounting is essential for calculating taxes correctly, distributing exempt profits and accounting to partners and the tax authorities.

It means chronologically recording all of the company's accounting facts in the company's own books (Journal and General Ledger, usually in digital format today). It involves recording income, expenses, investments, payroll, taxes, etc., in accordance with Brazilian accounting standards. At the end of each financial year, these records make it possible to generate the financial statements: balance sheet, profit and loss account, cash flows, explanatory notes, in accordance with the Companies Act and the Accounting Council's rules. The bookkeeping must be signed by a qualified accountant and, in the case of obligated companies, currently transmitted to SPED (Public Digital Bookkeeping System).

In addition to continuous bookkeeping, there are accessory obligations at different intervals. On a monthly basis, companies calculate taxes (such as IRPJ/CSLL in Real Profit, PIS/Cofins, ISS, ICMS) and submit declarations such as GIA (ICMS) or PGDAS-D (Simples Nacional). Quarterly or annually, depending on the regime, they calculate corporate income tax. Every year, almost all of them need to submit the ECD - Digital Accounting Bookkeeping (with the accounting books) - and the ECF - Tax Accounting Bookkeeping (IRPJ calculation declaration). Companies with employees send eSocial and SEFIP monthly (payroll and FGTS data) and DCTFWeb (Declaration of Federal Tax Debits and Credits) to consolidate social security contributions.
validcertificadora.com.br
. In other words, there is an extensive schedule of obligations, making the support of an accountant essential.

The ECD is the digital version of the accounting books Diário, Razão and financial statements, sent to the government via SPED. All companies that are obliged to keep full accounts must submit it annually (usually by the end of May or June of the following year). Exempt from the ECD are Simples Nacional companies, public bodies, small non-profit organizations and inactive companies.
legisweb.com.br
. However, even Presumed Profit companies can fall under the obligation if, for example, they distribute profits above the exempt limit or have an angel investor's contribution.
legisweb.com.br
. In short, Real Profit companies always submit ECD; Presumed Profit companies submit it if they meet certain criteria, and Simples companies usually do not.

The ECF is an annual digital declaration that consolidates all the economic information and tax adjustments for calculating the IRPJ (Corporate Income Tax) and CSLL (Social Contribution on Profits) due. It replaced the old DIPJ. All legal entities, except those covered by the Simples Nacional regime, are obliged to submit the ECF annually. It imports data from the ECD (if any) and includes Real Profit adjustments or Presumed Profit information to allow the IRS to verify the tax base. The deadline for submission is usually the end of July of the following year. Inactive or immune companies must also submit it if they have any taxable activity.

SPED Fiscal, also known as EFD ICMS/IPI (Digital Tax Bookkeeping for ICMS and IPI), is a monthly digital file that records tax documents (incoming and outgoing invoices) and the calculation of ICMS (state) and IPI (federal). It replaces paper tax books. The requirement falls on companies that are ICMS or IPI taxpayers - generally industries, traders and importers. Simples Nacional companies in some states are exempt from sending EFD, but most medium-sized and large companies are obliged to do so. It is sent monthly, by the 20th of the following month, via the SPED system. The EFD allows the tax authorities to cross-reference data from electronic invoices and calculate taxes due, increasing control over tax obligations.

eSocial is the government's unified system for sending payroll information and labor, social security and tax obligations. In it, the company digitally reports admissions, dismissals, salaries, contributions to the INSS, FGTS, reports of accidents at work, health and safety data, among other events. eSocial has replaced several separate declarations (CAGED, GFIP, RAIS) with a single flow. For the company, this means that every hiring or contractual change, as well as the closing of the monthly payroll, must be informed in eSocial by the deadlines set. All Brazilian companies will be integrated into eSocial in phases between 2018 and 2019
validcertificadora.com.br
. Thus, payroll is now directly linked to this system - only after sending the events to eSocial is the company able to generate the corresponding FGTS and DCTFWeb forms.

EFD-Reinf is the Digital Tax Bookkeeping of Withholdings and Other Tax Information. It complements eSocial, concentrating data on withholding taxes on services (IRRF, CSLL, PIS/COFINS on invoices), gross revenue information for calculating contributions and CPRB (social security contribution on revenue) data. DCTFWeb, on the other hand, is the definitive monthly statement in which the company consolidates the debts calculated in eSocial and EFD-Reinf (social security contributions, withholding income tax, etc.) and confesses these debts in order to issue the payment slip (DARF). In short, eSocial and EFD-Reinf feed into DCTFWeb, which has replaced the old form (GPS) and the declaration of contributions (GFIP). DCTFWeb must be transmitted every month, by the 15th working day of the following month, ending the payroll and payment cycle.

Yes, it is highly recommended and, in practice, mandatory. Every company, except MEI (individual micro-entrepreneur), must have a technical accounting officer - an accountant or accounting technician registered with the Regional Accounting Council (CRC). Although the law does not require an accountant as an employee, the complex obligations of bookkeeping and declarations require technical knowledge and digital certification, which generally only an accountant has. International companies often outsource accounting to local accounting firms (BPO) to ensure compliance. Without a qualified professional, the company can make mistakes, miss deadlines and suffer penalties.

Failure to comply with these obligations entails fines and the risk of other penalties. For example, not submitting the ECD or ECF on time generates a fine of up to thousands of reais, proportional to turnover. Failing to keep books or fraudulent accounting records is a serious infraction, subject to fines and even criminal charges in extreme cases. Defaulting on declarations such as DCTF, SPED or eSocial can lead to a pending status with the CNPJ, making it difficult to obtain negative certificates and financing. In addition, the company loses legal protection in the distribution of exempt profits if it does not have regular accounting. In short, the lack of accounting and tax compliance exposes the company to tax assessments, impediment to participation in tenders and other inconveniences that compromise its credibility.

Sources (accounting and obligations):

Federal Revenue Office - IN RFB 2.003/2021 (ECD Mandatory)
legisweb.com.br

Portal Gov.br - eSocial for companies (mandatory schedule)
validcertificadora.com.br

Civil Code (Law 10.406/2002), Art. 1.179 - obligation to keep regular accounts

The Brazilian tax system has various taxes at different levels. The main federal taxes on the company are: IRPJ (Corporate Income Tax) and CSLL (Social Contribution on Net Profit) - levied on profit; PIS and COFINS - levied on turnover (they can be cumulative or non-cumulative, depending on the regime); IPI - Tax on Industrialized Products (if the company industrializes or imports goods). At state level there is mainly ICMS - Tax on the Circulation of Goods and Services (levied on sales of products and some transportation and communication services). At the municipal level there is ISS - Tax on Services (applies to the provision of services in general). In addition to these, there are labor contributions (FGTS, INSS on payroll) and others specific to the activity. When importing goods, II (Import Tax), IPI, PIS/Cofins-Import and ICMS are levied on entry.
porthosinternational.com.br
gov.br
. The total tax burden varies according to the regime chosen and the nature of the business.

These are the tax regimes for calculating IRPJ/CSLL and PIS/COFINS for companies. Under Real Profit, the taxes due are calculated on the company's actual profit (income minus expenses, with tax adjustments). It is compulsory for large companies and some sectors, and allows all deductible expenses and PIS/COFINS credits to be used (non-cumulative system).
sebrae.com.br
. In Presumed Profit, the legislation presumes a profit margin based on turnover: for example 8% for commerce/industry and 32% for services. IRPJ (15% + additional) and CSLL (9%) are applied to this presumed base. It is simpler, but does not allow detailed deduction of expenses; applicable to companies with turnover of up to R$ 78 million per year
sebrae.com.br
. Simples Nacional, on the other hand, is a simplified regime for micro and small companies (turnover up to R$ 4.8 million/year), unifying several taxes (IRPJ, CSLL, PIS, COFINS, ICMS, ISS, CPP) in a single form with a reduced rate.
sebrae.com.br
. Simples has progressive tax rates according to revenue and activity restrictions. In summary: Lucro Real is more complex but accurate, Presumido is simplified on an estimated basis, and Simples is advantageous for very small businesses (when eligible).

The legislation defines cases in which the Real Profit (full regime) is mandatory. The main situations: companies with an annual turnover above R$ 78 million - above this limit they cannot use Presumed Profit
sebrae.com.br
; companies in the financial sector in general (banks, brokers, insurance companies, factoring, etc.) must be Real Profit regardless of turnover
sebrae.com.br
; companies with profits abroad; and some specific activities, such as companies benefiting from tax exemption/reduction (to prove entitlement) and those with losses to offset. In addition, any company that does not fall within the limits or conditions of the simplified regimes ends up in Real Profit by exclusion. It's worth remembering that opting for Real Profit brings with it more ancillary obligations, but it can be advantageous if the company's profit margin is low or if there are a lot of tax credits to take advantage of.

In Real Profit, the company calculates the net accounting profit for the period (quarterly or annually) and then makes the extra-accounting adjustments provided for in the tax law (additions of non-deductible expenses, exclusions of incentives, offsetting of losses, etc.). IRPJ (15% on profit, plus 10% additional on the portion exceeding R$ 20,000 per month) and CSLL (9% on profit, or 20% if a financial institution) are calculated on the adjusted tax profit. As far as PIS and COFINS are concerned, Real Profit companies are generally under the non-cumulative regime, i.e. they pay 1.65% of PIS and 7.6% of COFINS on revenues, but can deduct credits calculated on various expenses (inputs, electricity, rents, etc.). Thus, the tax burden is levied on the company's actual results. This system requires more detailed controls, but avoids paying tax on presumed profits if the company has a low margin or a loss.

In Presumed Profit, the company simplifies the calculation of IRPJ and CSLL. Instead of calculating actual profit, a fixed percentage of presumption is applied to gross revenue to determine the taxable base. For example, for commercial and industrial activities, 8% of profit is presumed (for IRPJ) and 12% for CSLL; for services in general, 32% is presumed. IRPJ 15% (+ additional if the quarterly base exceeds ~R$60 thousand) and CSLL 9% are calculated on this presumed base. This calculation is made on a quarterly basis. With regard to PIS/COFINS, those on Presumed Profit adopt a cumulative system: they pay 0.65% of PIS and 3% of COFINS on turnover, without the right to credits on inputs. Lucro Presumido (Presumed Profit) is allowed for companies with a turnover of up to R$ 78 million/year and which are not obliged to use Lucro Real (Real Profit). It simplifies obligations, but the presumption can be disadvantageous if the actual profit margin is lower than the presumed one.

It depends on the partner's situation. Complementary Law 123/2006 prohibits opting for Simples Nacional if the company has a partner who is a legal entity or if any partner (individual or legal entity) is domiciled abroad.
crumbs.co.uk
. In other words, if the foreign investor is a legal entity, the company cannot automatically join Simples. If they are an individual not resident in Brazil, they can't either. However, if the foreign partner obtains tax residency in Brazil (for example, a resident visa), and is no longer domiciled abroad, the company could, in theory, opt for Simples as long as it meets the other size and activity requirements. In practice, the majority of foreign-controlled companies are excluded from Simples and must adopt Presumed or Real Profit depending on their turnover.

Importing goods into Brazil involves specific taxes on entry. The main import taxes are II (Import Tax) - customs tariff calculated on the CIF value (cost, insurance and freight), with rates that vary according to the classification of the product; IPI (Tax on Industrialized Products) - applied to industrialized products also on import, with a rate according to the TIPI; PIS-Import and COFINS-Import - federal contributions with standard rates of 1.65% and 7.6%, calculated on the customs value + II; and state ICMS - levied on the sum of the customs value + all federal taxes + customs expenses, with a general rate of 17% or 18% (may vary by state).
porthosinternational.com.br
porthosinternational.com.br
. In addition, there is the AFRMM (additional freight for merchant shipping) of 25% on maritime freight, when applicable. Before importing, the company must be qualified in Radar (Siscomex) with the Federal Revenue Service, which is the register for operating in foreign trade.

Yes. RADAR is the registration required for a company (or individual) to have access to Siscomex, the integrated foreign trade system. Without being authorized, a company cannot register import or export declarations. Qualification is obtained from the Federal Revenue Service and involves an analysis of the company's financial capacity, defining a limit for operations (Express, Limited or Unlimited modalities depending on size and history). The process is currently electronic via the Gov.br portal and usually requires basic documentation from the company and its partners. Once qualified, the company receives a login to operate on Siscomex and can then carry out customs clearance as normal. In short, becoming RADAR-registered is a mandatory preliminary step before the first import or export
gov.br

Brazilian exports of products are generally exempt from taxes to encourage competitiveness abroad. There is no export tax in most cases (there is for very few items, such as leather and some minerals, but this is an exception). Sales abroad do not pay ICMS, IPI, PIS/COFINS - in fact, these taxes are levied domestically and, when exporting, the company can even credit itself with taxed inputs (the non-cumulative principle) and obtain reimbursement of accumulated credits. In terms of control, the exporter needs to register the Single Export Declaration (DU-E) on the Siscomex Portal and meet any requirements of the destination country (certificates of origin, health certificates, etc.). Some exports of controlled products (weapons, medicines, works of art) require specific authorizations. But for most sectors, exporting is simplified and exempt from Brazilian tax, following the logic of taxation only at destination.

Sources (Taxation and regimes):

Sebrae - Tax framework: Simples vs Presumido vs Real
sebrae.com.br
sebrae.com.br

Gov.br (Invest & Negócios) - Import Taxation (taxes levied)
gov.br

Complementary Law 123/2006, Art. 15, VI - prohibits a company with a partner abroad from opting for Simples Nacional
crumbs.co.uk

In 2023, Brazil approved a wide-ranging Tax Reform (Constitutional Amendment 132/2023) focused on consumption taxes. The main change is the unification of five current taxes (PIS, Cofins, IPI, ICMS and ISS) into two new VAT-type taxes (Value Added Tax).
www12.senado.leg.br
. The federal CBS (Contribution on Goods and Services) and the state/municipal IBS (Tax on Goods and Services) will be created. The reform aims to simplify the system, end the “fiscal war” between states and municipalities and make taxation more transparent. It also introduced the principle of taxation at destination (the tax goes where the final consumer is, no longer where the provider/seller is). The change is major, with gradual implementation by 2033.

The CBS will be the new federal tax that will unify the current PIS and Cofins contributions. It will be a value-added tax levied on most goods and services, collected at source (the federal government) but shared in the revenue with the social security system. The rate will still be set by complementary law, but a rate of around 12% to 14% is projected for the CBS (being part of the total VAT rate). CBS will have a broad non-cumulative character - companies will be able to take advantage of credits on practically all inputs and costs (more comprehensive than the current PIS/Cofins regime). CBS is scheduled to be fully implemented in 2027, after a transition period in 2026 with a reduced test rate.
www12.senado.leg.br
. It will simplify the currently complex calculation of PIS/Cofins, but will require systems and suppliers to adapt, since it will replace two taxes.

The IBS will be the new state and municipal tax, unifying the ICMS (state) and ISS (municipal). It will also be a non-cumulative VAT, collected on a shared basis between states and municipalities according to the destination of consumption. There will be national IBS legislation with reference rates, but each federal entity will be able to adjust its rate within limits, guaranteeing the same base. The implementation of IBS will be longer: there will be a transition period between 2029 and 2032 in which ICMS/ISS and IBS will coexist, and from 2033 IBS will fully replace the old taxes
www12.senado.leg.br
www12.senado.leg.br
. A combined IBS rate (state+municipality) of around 14% to 16% is expected, to make up a total burden of ~25% together with CBS. The IBS should eliminate the tax war, as credits will be instantaneous and the tax will go to the destination, making conditions uniform between states.

The transition will be gradual, to avoid jolts. A test phase will come into effect in 2026: CBS+IBS at 1% will be levied on operations, in addition to current taxes, to adjust systems.
www12.senado.leg.br
. The full CBS starts in 2027, when PIS and Cofins will have been abolished and replaced by the CBS. IBS, on the other hand, will have a slower transition: from 2029 to 2032, IBS will gradually increase while ICMS and ISS are proportionally reduced. By 2033, IBS will have been fully implemented and ICMS/ISS will have been abolished. During the transition, there will be mechanisms for double counting and credits, so that companies deal with the old and new models simultaneously. There will also be a compensation fund for states/municipalities that lose revenue and a period in which the Union will calibrate reference rates to keep the burden equivalent to the current one
www12.senado.leg.br

Currently, in ICMS there are complex shares between origin and destination in interstate sales, and in ISS the tax stays entirely in the municipality of the provider (with a few exceptions). With the reform, both CBS and IBS follow the destination principle: the total rate applied is that of the final consumer's location, and the revenue goes entirely to that location. For companies, this simplifies interstate operations - there will no longer be any need to calculate a rate differential or interstate sharing as with the ICMS. On the other hand, companies will need to correctly inform the location of their customers and adapt to a single total rate per operation (instead of an “outgoing” rate and any incoming credits per state). When it comes to pricing, companies selling to consumers in states with a higher tax rate may have a higher final price, and vice versa. But since all credits will be used at the destination, the tax “embedded” in the chain is eliminated, tending to neutralize regional differences in charges.

CBS/IBS, being pure value-added taxes, eliminate today's residual cumulativeness. This should increase transparency: for example, an invoice should highlight the tax in amount and percentage, so that the customer knows exactly how much tax they pay
www12.senado.leg.br
. For companies, all CBS and IBS input credits will be usable (there will no longer be as many restrictions as there are today with PIS/Cofins). This is positive for those with long chains, as they avoid paying “tax on tax”. In many cases, the effective tax cost may even fall if the company was previously unable to take advantage of credits. However, sectors currently benefiting from exemptions or special regimes may lose advantages, seeing their costs increase. With regard to prices, it is expected that with the broad base and standardized rate, some products or services may become cheaper and others more expensive - the estimated final rate (~25% adding CBS+IBS) may be close to the current average burden, but the distribution of the burden between sectors and regions will be different
www12.senado.leg.br
. Companies will have to analyze their new balance of credits and debits; the tendency is for distortions to be reduced and the tax to be passed on in full in the final price.

Many ICMS and ISS tax incentives granted by states and municipalities will be gradually eliminated or replaced. The reform aims to put an end to the tax war, so it will no longer be possible for a state to give an IBS reduction to attract companies (there will be a uniform rate and automatic distribution of revenue). Instead, a “cashback” mechanism has been created: the return of tax paid by low-income families on essential products (basic food basket). Regional incentives such as the Manaus Free Trade Zone will have specific treatment: EC 132 guaranteed that the Free Trade Zone will maintain equivalent benefits, possibly via a presumed credit or zero rate of Selective Tax, to preserve local competitiveness. Other current regimes, such as exemption from PIS/Cofins for exports and immunities, will continue, but under new nomenclatures (CBS/IBS will also not be levied on exports, for example). In the short term (transition until 2032), many ICMS/ISS benefits will still be in force, but then tend to disappear, requiring companies to re-evaluate their costs without tax subsidies.

In general, the reform seeks to level the playing field for all economic agents. From the point of view of a multinational, CBS/IBS could represent a simpler environment, similar to VAT in other countries, reducing compliance costs when investing in Brazil. There will be a greater possibility of full tax credits on inputs, which benefits industrial and exporting companies (which will be able to recover credits more easily). On the other hand, some tax planning used today, such as taking advantage of regional or sectoral benefits, may disappear, increasing the burden on certain operations. Long-term international contracts will need to be reviewed to adjust tax clauses to the new reality (for example, an imported service today has 0% of ISS if contracted from abroad, but in the future it may have IBS charged at its destination in Brazil). All in all, foreign companies may see opportunities to enter a market with more rational and neutral consumption taxation - but they must prepare for the transition phase and possible rate increases in segments that are currently favored. In terms of compliance, those who already operate VAT in other countries will be familiar with the logic, but will need to adapt billing systems and ERPs to CBS/IBS.

Yes, adjustments will have to be made. The billing and ERP systems will have to be updated to calculate and highlight CBS and IBS on the invoice, as well as generating the records for calculating and crediting these taxes. This means changes in the configuration of NF-e, bookkeeping and accounting reports. In the contractual field, contracts with customers and suppliers that currently mention taxes may require revision: for example, net price agreements or adjustment clauses may need to accommodate the change in taxes. As the transition involves a period of double charging (old taxes + new taxes), companies should provide in their contracts for how to deal with this overlap of taxes and the passing on of costs. It is advisable to follow the regulations (complementary laws already enacted, such as LC 214/2025, and future ones) and, with legal support, update commercial and technological contracts to ensure that, in the changeover of the tax system, the company continues to operate in compliance without interruptions in billing.

Sources (Tax Reform and its impacts):

Agência Senado - Unification of consumption taxes (EC 132/2023)
www12.senado.leg.br

Agência Senado - VAT of ~27.5%, end of cascading effect in taxes
www12.senado.leg.br

Agência Senado - Implementation schedule CBS (2026) and IBS (2033)
www12.senado.leg.br

BPO is the outsourcing of business processes. In the accounting context, it means hiring a specialized company to take care of internal functions such as accounting, tax, finance or payroll. Instead of maintaining an in-house accounting department, the foreign company can delegate these routines to a BPO provider in Brazil. The accounting BPO usually includes classification and accounting entries, tax calculation, preparation of statements, compliance with ancillary obligations and management reports. The advantage is that it relies on experienced professionals and up-to-date technology, guaranteeing compliance and freeing the company to focus on its core business. In short, it's “renting” the entire accounting and financial operation in an integrated and reliable way

A complete accounting BPO package can include: corporate accounting (bookkeeping of all accounting facts and issuing of balance sheets), tax (calculation of direct and indirect taxes, filing of returns such as SPED, DCTF, etc.), accounts payable and receivable (financial management, bank reconciliation), payroll (processing of salaries, social charges and eSocial), and also management reports in two languages if necessary. BPO companies usually also offer compliance with specific multinational obligations, such as IFRS or USGAAP reporting, consolidation for the parent company, support for audits and compliance with inspections. The service is customized according to the client's demands - for example, foreign startups may initially outsource everything (from finance to payroll), while some multinationals outsource only the accounting and tax part to guarantee local compliance.

BPO companies work with SLAs (Service Level Agreements), which define deadlines and quality standards. For example, it is defined that monthly balance sheets will be delivered by a certain date, or that questions will be answered within X hours. To guarantee this, the BPO allocates a dedicated team or multidisciplinary “service cell” to the client, often with bilingual professionals to communicate with the head office. In addition to the human factor, they use technology for automation - integrated systems that capture electronic invoices, calculate taxes and monitor pending issues. There are also frequent internal reviews and audits at the BPO to avoid errors. Performance reports are shared with the client, providing transparency. Thus, with standardized processes and specialized teams, the BPO is able to rigorously meet obligations on time (avoiding fines for delays) and maintain the quality of the information (reliable and legally compliant figures).

Yes, as long as you choose a reliable BPO provider. Accounting professionals in Brazil follow a code of ethics and outsourcing companies sign confidentiality and liability contracts. Data security is a concern: BPOs adopt secure tools and policies in line with the LGPD (data protection law) to protect financial and employee information. Many international companies opt for BPOs precisely to mitigate risks - outsourcers already have up-to-date know-how on legislation, reducing the chances of non-compliance. Of course, there must be monitoring: the contractor must periodically validate the results, have access to the books and negative certificates to check that obligations are up to date. In short, it's as safe as hiring an in-house team - with the advantage that the BPO usually has quality certifications and professional insurance, offering extra layers of guarantee.

Systems integration is a key point in modern BPO. BPO companies in Brazil are used to working both on their own software and directly on the client's ERP (Enterprise Resource Planning). For example, if the multinational uses SAP or Oracle, the BPO team can launch operations and close reports within the same system, ensuring that local data is consolidated globally. Alternatively, if it uses a local system, the BPO periodically exports balance sheets and statements in a compatible format to headquarters. API integration tools and Excel reports are common. As mentioned in the BPO materials, the provider can run the accounting on its own system or on the client's, as long as it has the necessary permissions
bernhoeft.com.br
. This flexibility ensures that the international company has real-time visibility of the figures in Brazil and that information flows without rework. Ideally, the contract should include plans for the recording platform and how data will be exchanged (remote access, secure VPN, etc.).

Accounting outsourcing offers several advantages, especially for new foreign companies: cost-effectiveness - maintaining an in-house team (accountants, tax specialists, personnel department) can be more expensive, while a BPO dilutes costs between clients and offers services for a lower fee. Expertise and updating - the BPO has specialists in various areas (taxation, labor) and keeps up to date with changes in the law, reducing the risk of errors. Scalability - if the company grows or contracts, the BPO adjusts the size of the team easily, unlike a fixed department. Focus on core business - local management can concentrate on the company's operations while the bureaucracy is left to the BPO. On the other hand, it requires good communication and trust in the supplier. In general, for international companies that haven't mastered Brazilian complexity, outsourcing accounting is almost a natural way to guarantee compliance without setting up a whole structure from scratch.

Sources (BPO and backoffice):

HLB Brazil - BPO solutions (tax, accounting, finance, payroll)
hlb.com.br

HLB Brasil - Agile BPO: operation on the client's ERP or own
hlb.com.br

Bernhoeft - Accounting BPO FAQs (use of the client's ERP)
bernhoeft.com.br

The main types are: CLT (Consolidation of Labor Laws) hiring - the employee is registered as an employee, with all labor rights; PJ (Legal Entity) hiring - when a professional's company (service provider) is hired instead of a direct employment relationship; outsourcing via a service company - the hiring is done with an intermediary who provides labor; temporary work - via an authorized agency, for a short term, following Law 6.019/74; and special programs such as internships (for students, Law 11.788/2008, without CLT ties but with a stipend) and young apprentices (special apprenticeship contracts for young people aged 14 to 24, with simplified CLT ties). Each model has its uses: CLT is the standard for permanent positions; PJ and outsourced workers can be used for specific projects or services; temporary workers meet seasonal demand; trainees and apprentices for training. The choice must take legislation into account in order to avoid mischaracterization (for example, hiring someone as a PJ who acts as an employee can generate labor liabilities).

Hiring under the CLT regime means establishing a formal employment relationship governed by the Consolidation of Labor Laws. CLT employees have a series of guaranteed rights: minimum wage or floor, controlled working hours (usually 44 hours a week), paid overtime, paid weekly rest, 13th salary (an annual bonus equivalent to a salary), paid vacation of 30 days a year + 1/3 additional, payment of FGTS (Severance Indemnity Fund) by the employer equivalent to 8% of the monthly salary.
bernhoeft.com.br
, and protection in the event of dismissal (prior notice, severance pay and a 40% fine on the FGTS balance in the event of unfair dismissal). For the employer, in addition to paying these rights, there are ancillary obligations: registering the employee in the employee's portfolio, sending data to eSocial, paying monthly INSS (employer's social security contribution ~20% on the payroll) and FGTS, and complying with health and safety standards. In other words, the CLT brings additional charges and costs that increase the total cost of the employee (labor charges add up to around 70% on the nominal salary), but it is the form that ensures total protection for the worker and legal compliance for the employer.

You can, but with caution. Hiring someone as a PJ means instead of signing a contract, signing a service contract with the professional's company (own CNPJ or intermediary company). This arrangement is common for consultants, developers, sales representatives, etc., and can reduce immediate costs. However, the relationship must be autonomous: without subordination, rigid hours or personality, otherwise the Labor Courts may recognize a covert employment relationship. Outsourcing through another company (for example, hiring a cleaning or IT company that allocates employees) is allowed even for core activities (after the 2017 Labor Reform), as long as the contractor is suitable. The hiring company must ensure that the outsourcer complies with its labor obligations, as there is subsidiary liability in the event of default. In summary: it is feasible to use PJs or outsourcers to gain flexibility and reduce direct labor costs, but it is essential to formalize robust contracts and maintain the characteristics of autonomy to avoid the risk of labor liabilities.

A temporary contract is one governed by Law 6.019/74, used to meet the need for a temporary replacement of staff or an extraordinary increase in service. It is done via a registered temporary work company; the temporary worker has some CLT rights (equivalent pay, limited working hours, rest), but no stability and a maximum term of 180 days (extendable for a further 90). An internship is not a job: it is regulated by a specific law (11.788/2008) and is intended for students. The trainee receives a stipend and transport vouchers, has a limited working day (up to 6 hours a day) and there is no employment relationship if the rules are followed (including supervision and compatibility with studies). An apprentice is a young person (14 to 24 years old) hired under a special apprenticeship contract (CLT, but with different conditions) for up to 2 years. The apprentice receives theoretical training at a partner institution and practical training at the company, and has labor rights (minimum hourly wage, 13th salary, vacations coinciding with school vacations) but does not pay FGTS of 8% (only 2%). Companies of a certain size are obliged to take on apprentices (5% to 15% of employees in jobs that require training). In short, these models meet specific needs and have appropriate protections for each case.

In addition to the agreed basic salary, employers in Brazil pay a number of compulsory charges. The main ones are: FGTS - a monthly deposit of 8% of the salary into a linked account for the worker; INSS patronal - the company's social security contribution (~20% of the salary, which may vary depending on the RAT and third party rates); 13th salary - a Christmas bonus usually paid half in November and half in December, equivalent to an additional salary per year; annual vacation - the employee receives, when going on vacation, the month's pay + an additional 1/3; notices and fines on dismissal - if dismissed without cause, pays notice (1 month, or indemnified) and a fine of 40% of the accumulated FGTS balance; transport vouchers - subsidizes the employee's travel (maximum deduction of 6% from the payroll); meal or food vouchers - not required by federal law (unless a collective agreement determines), but many companies offer them; health insurance - an optional benefit common in medium/large companies. Adding up direct legal charges, the company can pay approximately 70% to 100% more than the employee's net salary. In addition, it must consider accounting provision costs (13th, proportional vacation) and occupational health and safety funds. These “invisible” costs need to be calculated in the hiring budget.

Not directly - to hire employees in Brazil you need to have local legal personality or at least a specific registration. A foreign company (without a CNPJ in Brazil) can hire independent contractors (PJ) or remotely hire individuals as contractors, but cannot simply register an employee under CLT, as this requires an employer CNPJ and compliance with local legislation (eSocial, FGTS, etc.). Alternatives if the company doesn't want to open a branch: use an Employer of Record (EOR), which is a local outsourcing company that hires the professional formally and “rents” the service to the foreign company. Alternatively, assess whether the professional can act as a PJ providing services from abroad (bearing in mind the risks of ties if there is subordination). There is also the option of a “foreign company domiciled abroad” obtaining a CEI/CNO registration for certain social security payments, but this is complex and limited. In short, to have a full CLT employee in Brazil, the solution is almost always to set up a local entity or hire a third party.

You can, but this situation requires caution. An employee working directly for a foreign company from Brazil, without a local entity, creates a number of risks: from a labor point of view, this worker does not have CLT protection, but may in the future claim an employment relationship in Brazilian court against the foreign company if there is subordination and personality, even without a local CNPJ. From a tax point of view, if this person operates as a permanent representative of the company, it could characterize a permanent establishment, exposing the foreign company to taxation in Brazil on profits from that activity. Alternatives to mitigate this: hire the professional as a PJ (consultant), with an international service contract - they would receive payments as a legal entity (with possible import taxes on services and IR withheld at source). Or use a Brazilian Employer of Record company, which formalizes the employee under its structures and passes on the cost. This second option is the safest in terms of compliance: the worker is registered and protected, and the foreign company does not directly assume the obligations. In all cases, it is important to seek advice to prevent the remote worker from becoming a legal or tax liability.

The biggest risk is the configuration of the so-called permanent establishment (PE). This tax concept refers to a fixed presence or representative in the country capable of generating local tax obligations for the foreign company. For example, if the remote employee in Brazil makes decisions, enters into contracts or performs core business activities for the foreign company on an ongoing basis, the Brazilian authorities may understand that there is a “de facto branch”. This would imply charging taxes such as IRPJ and CSLL on the profits attributed to this presence, as well as fines for non-registration. In addition, there are labor risks - if an employment relationship is identified, the company could face claims in the labor courts, and without a CNPJ, any assets or revenues that pass through Brazil could be charged. There is also the social security risk: uncollected INSS and FGTS contributions. In international treaties that Brazil has, there are EP clauses that set limits (for example, EP if the presence lasts more than 6 months, or if there is a dependent agent).
deel.com
deel.com
. Therefore, having a direct employee without a local entity is an apparent saving that can be costly if characterized as EP. The best practice is to formalize via opening a branch/subsidiary or using intermediary companies to remain compliant.

If a company abroad hires a Brazilian supplier (company or individual), the payment will be an international remittance and involves exchange and tax issues. Payment must be made via a foreign exchange contract at an authorized bank, with a classification of the service or good purchased. From the Brazilian supplier's point of view, they will receive the payment in converted local currency and will be subject to domestic taxes (e.g. income tax, ISS if it is a service). For the paying foreign company, there are usually no taxes in Brazil on the remittance itself - it is the Brazilian recipient who bears the taxes. An exception is if a Brazilian service or royalty is purchased: then the Brazilian supplier, when issuing the invoice, can include taxes such as ISS. The foreign company must check that there are no withholding taxes required locally: in the reverse case (Brazil paying abroad) there are, but not from abroad to Brazil. In summary, paying Brazilian suppliers involves formalizing a contract, receiving a Brazilian invoice and making the exchange legally. It is also important to pay attention to the legislation of the country of origin in relation to withholding tax (but this is generally irrelevant when paying to Brazil, since treaties avoid double taxation in this regard).

The distribution of profits or dividends from a Brazilian company to its foreign parent company is relatively simple and exempt from withholding tax under current legislation. In other words, the company in Brazil calculates its net profit after tax (IRPJ/CSLL) and can distribute this profit to the parent company abroad without paying additional exit tax (the IRRF rate on dividends is currently 0%). To send them, the Brazilian company must be in good standing, with closed balance sheets and declared profits. A document called a dividend declaration is prepared and an exchange operation classified as a remittance of profits is carried out. The bank will require proof that the amounts remitted correspond to balance sheet profits (e.g. financial statements, minutes of approval of results). In addition, the company must be up to date with the Foreign Investment Registry at the Central Bank (SCE-IED) in order to report the movement of capital
gov.br
gov.br
. It is worth remembering that if the parent company is in a country with a treaty, there is no additional taxation in Brazil; taxation will take place at the destination according to the investor's local rules (unless there are future changes, as there is discussion about taxing dividends, but until now this has been exempt). In short: remittance of dividends is free, exempt and part of the routine of multinationals, and they just have to follow the exchange and registration formalities.

Yes, when a Brazilian company pays for a service provided by a company or professional abroad, it generally has to withhold and pay some taxes. The main one is IRRF (Withholding Income Tax), with a rate of 15% on the amount paid, applicable to services in general (25% if the destination is a favored tax country, “tax haven”). In addition to IRRF, certain payments are subject to CIDE (Contribution for Intervention in the Economic Domain) of 10% - for example, remittances for technical services, technical assistance and royalties are subject to CIDE. There is also PIS/COFINS-Import on imported services (combined rates of 9.25%), and ISS if the service is used in Brazil and is listed in the complementary law (municipal rate of 2% to 5%). In short, if a Brazilian subsidiary pays, for example, the foreign parent company for consultancy services, it will pay IRRF 15%, CIDE 10% and PIS/COFINS 9.25% on that amount, totaling around 34%.
lfmaia.com.br, unless there is an international treaty eliminating IR (Brazil has few treaties that reduce IRRF for services). These taxes are obligations of the source of payment in Brazil. Therefore, cross-border contracts should be priced with this impact in mind. On the other hand, the purchase of goods (import of goods) does not involve IRRF, but those customs taxes mentioned in another answer.

Commercial relations between related parties (parent company and subsidiary/subsidiary) must be formalized in writing, preferably in a bilingual contract (Portuguese and the language of the parent company) in order to be valid locally and internationally. The contract must clearly specify the object (e.g. provision of technical services, license to use a trademark, purchase and sale of products), price and payment terms. It is important that it is at arm's length, as tax authorities will examine whether the values are compatible with prices charged to third parties - this involves transfer pricing rules. It is also recommended to include clauses on taxes (who bears withholding taxes, etc.) and choice of forum/arbitration. In Brazil, there is no obligation to register contracts for the import of services with a specific body since the extinction of Siscoserv, but the contracts may need to be presented to the bank when closing the exchange. For royalty or technology contracts, there is the (non-mandatory) option of registering with the INPI/Central Bank, which can be useful for protecting intellectual property and allowing certain payments to be remitted. In short, formalizing intra-group contracts well avoids disputes and helps with proof of expenses and compliance with transfer pricing rules.

Transfer Pricing are tax rules that prevent related companies (for example, a parent company and a subsidiary, or two subsidiaries of the same group in different countries) from manipulating transaction prices between themselves in order to reduce taxes. In Brazil, the rules apply to transactions between a company in Brazil and related parties abroad or even unrelated parties located in tax havens. They cover the import and export of goods, services, loans and other financial transactions. Until 2022, Brazil used a system of fixed margins: for example, imports of goods had to be priced up to a certain margin over domestic or international prices according to fixed calculation methods (PRL, PIC, etc.). As of Law 14.596/2023 and subsequent regulations, Brazil is adopting the OECD standard, based on the arm's length principle.
grantthornton.co.uk
. In other words, the intercompany transaction must take place at the same value as if the parties were independent. Companies need to demonstrate this through comparative pricing methods, margins or profit sharing, depending on the case. Therefore, whenever a Brazilian subsidiary buys from the parent company or vice versa, or contracts intercompany services, it must be vigilant: if there is a relevant volume, it is mandatory to calculate annually in accordance with the transfer pricing law and, if necessary, make adjustments for income tax bases. Failure to comply can lead to significant tax assessments.

Brazil has historically had its own system since Law 9430/1996, with predefined margins, different from the OECD standard. With the new legislation (Law 14.596/2023), convergence to the international standard is taking place. In general terms: for imports, if a Brazilian company buys from its linked company abroad, it must demonstrate that it has not overpaid in order to transfer profit abroad - there are comparative methods (PIC - independent price compared to third party price; PRL - resale price minus margin; CPL - production cost plus margin) to check if the price is within an acceptable range. If the price charged is higher than the reference price, the difference is taxed as a transfer adjustment. For exports, if the company sells cheaply to its affiliate abroad, it must prove that it is not sending disguised profit - there are methods (PVEx - comparative external sales price; PVA/PVV - price minus margin; CAP - cost plus margin) to ensure that it has not sold below market. With the adoption of the OECD model, Brazil will require more robust documentation and case-by-case analysis based on market benchmarks, using the arm's length principle.
grantthornton.co.uk
. 2023 was optional and 2024 onwards this new model was mandatory. In other words, multinational companies must prepare annual transfer pricing studies in Brazil, just as they do in other countries, to prove that their intercompany prices are in line with the market. This avoids double taxation or undue lack of taxation between jurisdictions.

Sources (international operation):

Decree 9.580/2018 (RIR) - Arts. 681-683 (IRRF on international remittances)

Law No. 9.430/1996 - Classic Transfer Pricing Rules in Brazil

Law No. 14.596/2023 - Aligning Brazil with the OECD Transfer Pricing standard
grantthornton.co.uk

After formalizing the company (CNPJ active, tax registrations made), the next step is to structure the accounting and tax management: hire a good accounting firm or in-house team, implement an ERP system to issue electronic invoices and control inventories, and register the company with the government portals (e-CAC from Receita, eSocial, etc.). It is advisable to obtain the initial negative certificates (federal, state, municipal) to make sure there are no outstanding issues. Next, deal with ongoing compliance: set up a calendar of tax obligations and payments, train local staff in the procedures. Also assess specific needs such as pending operating licenses, or Radar clearance if importing/exporting. Pay attention to hiring staff - follow labor regulations from the first employee onwards (eSocial registration, entrance exams). Finally, align transfer pricing policies, capital flows (registration with the Central Bank) and compliance policies (anti-corruption, LGPD) with the head office. Seeking legal and accounting advice at this early stage ensures that all these steps are taken correctly. Once the company is up and running, hold periodic compliance reviews for fine-tuning. This way, your operation will have solid foundations for growth in Brazil.

There are several resources. First, contact a trusted local accounting and tax consultancy or a corporate law firm with experience in helping multinationals - they can take on everything from incorporation to ongoing BPO. Secondly, use the official channels: the Gov.br/Federal Revenue Portal has manuals and guidelines (for example, the eSocial manual, frequently asked questions from the Revenue). Sebrae (Brazilian Micro and Small Business Support Service) also offers general guidance and booklets, although focused on smaller businesses, it can clarify initial procedures. Thirdly, participate in business communities, such as foreign chambers of commerce in Brazil (Amcham, Brazil-Europe Chamber of Commerce, etc.), as they often provide guides and pointers to best practices and professionals. Last but not least, invest in training your local team and in up-to-date tax software that already complies with Brazilian rules. If you have any specific doubts, always consult up-to-date legislation or ask for a second professional opinion - the Brazilian regulatory environment changes frequently. With qualified support and proactivity in seeking out information, your company will be able to navigate compliance more smoothly.