Most recently, the government tabled a tax reform bill (PL no. 3.887 / 2020) – “Contribuição sobre Bens e Serviços”. In English: “Contribution on Goods and Services – CBS” or “IVA – Federal”.
The aim of this latest reform bill is to amalgamate the existing Programa de Integração Social (PIS) and Contribuição para Financiamento da Seguridade Social (COFINS) taxes.
Currently Brazilian congress is analysing two other tax reforms which are very important for the economy:
These taxes will be replaced by two value added type of taxes:
PIS and COFINS are federal taxes charged on gross revenue, calculated and reported on a monthly basis as part of SPED EFD Contributions submission.
These taxes are determined using one of two tax regimes: Non-Cumulative or Cumulative.
In this regime, taxpayers (companies) are allowed to claim PIS / COFINS credits, in other words recover the taxes on certain costs and expenses which are related to:
This regime is applied to companies that calculate their corporate income tax under Lucro Real (actual profit method).
In this regime, taxpayers (companies) cannot claim PIS/COFINS credits and it is applied to:
Under law 10.865/04, pharma and consumer healthcare industries enjoy special regime benefits to allow them to operate under the ‘single-phase regime’. This means:
In life sciences, finished products are charged at different PIS/COFINS tax rates. This is based on the classification of products into three categories: Positive, Negative, and Neutral.
Impact on Life Sciences with the new proposed CBS tax reform:
Our team are experts in implementing tax technology projects in the most complex regimes of the LATAM region and provide experience in:
Current PIS/COFINS legislation
PIS and COFINS are federal taxes charged on gross revenue – calculated and reported on a monthly basis as part of SPED EFD Contributions submission.
These taxes are determined using one of two tax regimes – Non-Cumulative or Cumulative:
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