Brazil's Tax System
Nehring e Associados Advocacia, San Paulo
by David SIlva & Joao Burke
Brazil has traditionally had a complex tax system. The Federal Constitution of Brazil divides the tax jurisdiction among the (federal) Union, the States, the Federal District and Municipalities.
All levels of government may create taxes according to the tax jurisdiction granted by the Federal Constitution. The Union still has powers to create certain taxes, so-called contributions, such as social contributions, contributions for the intervention in the economic order and in the interest of professional or economic categories.
Upon exercising their taxing powers the Union, the states, the Federal District and municipalities are subject to many constitutional limitations, which exist to assure taxpayers a certain level of certainty and avoid arbitrary tax impositions.
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