Tax burden is planned to increase in Brazil

04.10.2011

Disappointing news for foreign investors has been brought by the discussion of officials in Brazil concerning taxation in the state. It should be mentioned that in comparison with some other countries of the region Brazil is clearly inferior to them in terms of the tax attraction. (Let’s recall that corporate tax rate reaches 34% in 2011 if certain company turnover exceeds). Despite this the government is convinced of the necessity to raise taxes and increase the tax burden. By 2011 tax rates at both the federal (0,32% of GDP) and municipal (0,35% of GDP) levels have been dramatically increased. Only the taxes levied at the level of Brazilian states have remained unchanged from 2010.

Expert’s opinion

“Even if tax rates increase influences negatively the tax attraction of any state it can not be claimed of total loss of interest to this country by the international business. It’s absolutely possible to say that foreign investors are still interested in Brazil and look carefully at this place and its economics relatively. The process of company formation and bank account opening is not complicated, by the way in comparison with European states Brazil is not so damaged by the crisis”.

On the basis: www.tax-news.com

Andrianova Irina ( the lawyer of international consulting department of “Honest & Bright”)