What taxes are levied on Telecommunications Services? - Calculation examples
Understand the taxes and contributions on telecommunications services, such as ICMS, PIS, COFINS, ISS, FUNTTEL and FUST. Learn how to calculate, reduce your tax burden and your rights as a consumer.
Telecommunications services, such as telephony, internet and pay-TV, are essential to modern life. However, these services are also among the most heavily taxed in Brazil.
In this comprehensive guide, we'll cover in detail the main taxes and contributions levied on telecommunications services, such as ICMS, PIS, COFINS, ISS, FUNTTEL and FUST. You'll also learn how to calculate these taxes and find tips for reducing your tax burden.
1. taxes and contributions
1.1 ICMS
ICMS, or Tax on the Circulation of Goods and Services, is a state tax levied on most services, including telecommunications. The ICMS rate varies according to the state, but is generally 25%.
Example calculation:
Considering a telephone bill of R$ 100.00 in São Paulo, the ICMS would be R$ 25.00:
Account value x ICMS rate = ICMS value
100,00 x 0,25 = 25,00
1.2 PIS/Pasep
PIS/Pasep is a social contribution intended to finance Social Security. The PIS/Pasep rate is 0.65% on the company's gross revenue.
Example calculation:
Considering the same telephone bill of R$ 100.00, the PIS/Pasep would be R$ 0.65:
Account value x PIS/Pasep rate = PIS/Pasep value
100,00 x 0,0065 = 0,65
1.3 COFINS
COFINS, or Social Security Financing Contribution, is another social contribution intended to finance Social Security. The COFINS rate is 3% on the company's gross revenue.
Example calculation:
Considering the same telephone bill of R$ 100.00, COFINS would be R$ 3.00:
Account value x COFINS rate = COFINS value
100,00 x 0,03 = 3,00
1.4 ISS
ISS, or Tax on Services of Any Nature, is a municipal tax levied on the provision of services. The ISS rate varies according to the municipality, but is generally 2%.
Example calculation:
Considering the same telephone bill of R$ 100.00 in São Paulo, the ISS would be R$ 2.00:
Account value x ISS rate = ISS amount
100,00 x 0,02 = 2,00
1.5 FUNTTEL
FUNTTEL, or the Telecommunications Universalization Fund, is a contribution intended for the development of telecommunications in Brazil. The FUNTTEL rate is 0.5% on the company's gross revenue.
Example calculation:
Considering the same telephone bill of R$ 100.00, FUNTTEL would be R$ 0.50:
Account value x FUNTTEL rate = FUNTTEL value
100,00 x 0,005 = 0,50
1.6. FUST
The FUST, or Telecommunications Supervision Fund, is a contribution intended to supervise telecommunications in Brazil. The FUST rate is 0.5% on the company's gross revenue.
Example calculation:
Considering the same telephone bill of R$ 100.00, the FUST would be R$ 0.50:
Account value x FUST rate = FUST value
100,00 x 0,005 = 0,50
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2. Total tax burden
The total tax burden on telecommunications services in Brazil is high, at around 40%. This means that for every R$ 100.00 paid for a telecommunications service, approximately R$ 40.00 goes to paying taxes and contributions.
Factors influencing the tax burden
Tax and contribution rates: The rates of taxes and contributions levied on telecommunications services vary according to the state, municipality and type of service.
Consumption profile: The customer's consumption profile also influences the tax burden. For example, customers who use telephone plans with lots of minutes and mobile internet pay more tax than those who use more basic plans.
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3. How to reduce the tax burden
3.1 Planning:
Planning is key to reducing the tax burden. It's important to choose the telecommunications plan that best suits your needs and check which taxes and contributions are levied on the service.
3.2 Portability:
Number portability allows customers to change operator without having to change their phone number. This can be a good option for finding plans with more competitive prices and lower taxes.
3.3 Contracting combined services:
Contracting combined services, such as telephone, internet and pay-TV, can lead to tax savings. This is because operators generally offer discounts to customers who contract more than one service.
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4. Legislation and changes
It's important to keep an eye on tax legislation, as it can change at any time. Changes in tax and contribution rates can have a significant impact on the tax burden of telecommunications services.
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5. Expert advice
If you have any doubts, it is advisable to consult a professional specializing in taxation. They will be able to help you analyze your telecommunications services and indicate the best options for reducing your tax burden.
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6. Final considerations
The taxation of telecommunications services in Brazil is complex and requires attention from consumers and companies. By finding out about the taxes and contributions levied on these services, it is possible to make more informed decisions and reduce the tax burden.
At CLM Controller, we understand the complexity of taxing telecommunications services in Brazil and we are here to offer a premium service that goes beyond conventional accounting. Our specialized team is prepared to provide detailed guidance on the taxes and contributions that impact these services, helping our clients to make more informed decisions and reduce their tax burden.
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