Income Taxes
In Brazil, income taxes can make up as much as 27.5% of a person's income. The fiscal year in Brazil goes from New Year's Day to New Year's Eve. There are also tax reductions for Brazilians such as paying for education, which can reduce by $1,266. Also private pension fees, donations, medical care, etc can give tax reductions.
Corporate Taxes
As of 2007 corporations with annual revenues exceeding $1,372,684 could pay a single tax in place of federal corporate income tax, federal social contribution on net income, federal contributions levied on income, federal excise tax, federal payroll taxes and contributions, state taxes on goods and services, and municipal services tax. The corporate taxes range from 4% to 17.42% depending on the type of corporation and its industry. As of the new tax system corporations can now calculate taxes based on actual profits method or presumed profits method. "Under the actual profits method (lucro real), the taxable income is calculated in accordance with corporate records and adjusted for tax purposes in line with the applicable regulations (standard taxable income calculation). The corporate taxpayers may estimate their monthly tax payments (IRPJ and CSLL) by using computation rules applicable for the presumed taxable income basis. A final balance sheet and statement of income must be drawn up at year-end and the annual tax liability (including income tax surcharge) computed. Any difference between the final tax liability computed and the amounts estimated and paid in advance or withheld at source will either be paid up on March of the following calendar year (subject to interest) or claimed as a tax credit," International Living.
Because corporate taxes have a range of taxes, it may end up being an incentive to put in less goods because if more goods are sold then taxes increase so much that either prices get too high or the business experiences negative marginal returns.
Because corporate taxes have a range of taxes, it may end up being an incentive to put in less goods because if more goods are sold then taxes increase so much that either prices get too high or the business experiences negative marginal returns.
Social Security Tax
For social security employers pay about 37.5%, 8.5% for severance fund and 28.8% for social security. Whereas employees pay from 7% to 11%, as International Living states. Here there is some inequality as employers are taxed much higher, from three to five times as much as employees,