The Tax on Services (ISS) is a municipal tax levied on the provision of services in Brazil. Each municipality has the autonomy to define the rates and collection rules, and this includes the city of Barueri. Understanding how the ISS works is essential for companies and freelancers to comply with their tax obligations correctly.
In this article, we'll cover everything you need to know about ISS in Barueri, with examples of calculations and a table to make it easier to understand.
What is ISS?
ISS is levied on services provided by companies and self-employed professionals. The tax is paid monthly and calculated based on the turnover generated by the services provided. The ISS rate can vary from 2% to 5%, depending on the type of service performed, as defined by local legislation.
Who should pay the ISS?
In Barueri, both companies and freelancers who provide services are obliged to pay ISS. Some examples of activities subject to this tax are:
- Engineering services;
- Maintenance and repair services;
- Medical services;
- Advocacy services;
- Beauty services.
Example of ISS calculation for a maintenance service
Let's imagine that a maintenance service provider in Barueri issues an invoice for R$ 5,000.00. We know that, in Barueri, the tax rate for maintenance services is 2%. The ISS will be calculated:
ISS=5000×0,02=R$100,00
In other words, for this service, the provider must pay R$ 100.00 in ISS.
ISS rates in Barueri
The rates vary according to the service provided. In Barueri, the rates can be 2%, 3%, 4% or 5%, depending on the type of activity. Below is a table of some of the most common rates.
| Service Provided | ISS rate (%) |
|---|---|
| Engineering and Architecture | 2% |
| Maintenance and Repairs | 2% |
| Medical Services | 3% |
| Advocacy | 4% |
| Aesthetic Services | 5% |
To check the correct rate for your service, it is important to access the municipal legislation or use the Barueri City Council's Electronic Invoice (NFS-e) system.
How does ISS payment work?
ISS in Barueri is paid monthly. The company or self-employed person issues the Electronic Invoice (NFS-e) with the value of the service provided and the tax is calculated automatically. ISS is usually due on the 10th of each month for services rendered in the previous month.
For example, if you provided services during the month of September, the ISS relating to these invoices must be paid by October 10th.
Example calculation for a Simples Nacional company
Companies opting for Simples Nacional collect ISS in a unified manner through the Simples Nacional Collection Document (DAS). In this case, the ISS rate is applied directly to the Simples Nacional calculation.
Imagine a company that provided services worth R$ 15,000.00 in the month and falls within the 6% bracket of Simples Nacional. The ISS rate within this band is 2%. The calculation would be:
ISS=15000×0,02=R$300,00
This amount of R$ 300.00 will be included in the DAS, along with other taxes such as IRPJ and PIS.
What happens if the ISS is not paid correctly?
Failure to pay or incorrect payment of ISS can lead to fines and interest, as well as legal complications for the company. In more serious cases, the company may be fined by the municipal tax authorities. It is therefore essential to maintain regular payment of this tax.
Don't leave without reading: How to calculate ICMS on the Simples Nacional surplus?
Special cases: ISS withholding
In some cases, ISS can be withheld at source, i.e. whoever contracts the service is responsible for collecting the tax on behalf of the provider. This is common when the service is provided to public bodies or large companies.
Example of ISS withholding
Let's assume that a company in Barueri hires a law firm for a service with a total value of R$ 10,000.00. The tax rate for legal services is 4%. In this case, the contractor (service taker) will be responsible for withholding the ISS of 4% and paying it to the municipality. The calculation would be:
ISS=10000×0,04=R$400,00
The customer will pay for the service, deducting the ISS amount, and will collect the tax from the city.
Questions and Answers about ISS in Barueri
1. Who has to pay ISS in Barueri?
ISS is mandatory for any person or company that provides services listed in municipal legislation. In Barueri, companies of all sizes, self-employed professionals and professional societies must pay the tax when they provide services subject to ISS.
2. What is the difference between the 2% and 5% rates?
In Barueri, the reduced rate of 2% usually applies to companies participating in the municipal tax incentive program or for specific services defined by law. The general rate for most services is 5%. It is always worth consulting local legislation or the City Hall to find out which applies to you.
3. How do I know if my service is subject to ISS?
In general, any service listed in Federal Complementary Law 116/2003 is subject to ISS. The municipality of Barueri follows this federal list and has its own regulations for local details. Accountants or the municipality itself can provide reliable guidance on the classification of the service.
4. Where can I issue a Service Invoice in Barueri?
In Barueri, the Electronic Services Invoice (NFS-e) is issued by the City Hall's electronic system. To do this, you must first register as a service provider. The system calculates the ISS due automatically at the time of issue.
5. Who is exempt from ISS in Barueri?
Municipal legislation provides for some specific exemptions or immunities - for example, activities carried out by philanthropic or religious organizations in certain cases. To be sure about a possible exemption, you need to consult the municipal law or an accountant directly.
6. How do I calculate ISS if I provide services to clients in other cities?
In general, ISS is due to the municipality where the service is actually provided. However, there are exceptions (such as construction services or health plans) where the law defines different rules. It is important to check the location of the service and the applicable legislation in order to calculate correctly.
Conclusion
Keeping your ISS payments up to date is essential to avoid tax problems and keep your company in good standing. A CLM Controller can help in this process by offering specialized accounting and tax consultancy services.
With over 40 years of experience and a team of qualified professionals, CLM Controller ensures that your company is always in compliance with tax obligations, optimizing the tax burden and simplifying the collection of taxes such as ISS.
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