Per diem

While Brazil doesn’t have a legally mandated per diem rate, it’s a common practice for companies to provide per diem allowances to employees traveling for business purposes. Since Brazil doesn’t have a specific per diem rate set by the government, this means companies have flexibility in determining their own per diem rates based on various factors.

Per diem allowances are typically intended to cover expenses like:

• Accommodation
• Meals
• Transportation
• Incidentals

Per diem allowances are generally not considered taxable income in Brazil, as long as they are reasonable and cover actual expenses incurred by the employee. There’s no specific tax-free limit set by the government, giving employers flexibility to their own rates.

Paperless

Brazil has been a pioneer in adopting electronic recordkeeping, particularly in the fiscal and labor areas. Here’s a breakdown of the key rules and regulations:

E-invoicing (NF-e and NFS-e) is mandatory for most businesses in Brazil for issuing invoices for goods (NF-e) and services (NFS-e). E-invoices must be digitally signed using a valid digital certificate to ensure authenticity and integrity. They also must be authorized by the tax authorities (SEFAZ) before they are considered valid. E-invoices must be stored electronically for a minimum period defined by law (generally 5 years).

SPED (a public digital bookkeeping system) is a broad initiative that encompasses various electronic bookkeeping requirements, including:

• SPED Fiscal: Digital bookkeeping for tax accounting.
• SPED Contábil: Digital bookkeeping for accounting records.
• SPED EFD-Contribuições: Digital bookkeeping for social security contributions.

Most companies are required to submit their accounting and tax information electronically through SPED.

Electronic records have the same legal validity as paper records, provided they meet the requirements of the law:

• Authenticity and Integrity: Electronic records must be maintained in a way that ensures their authenticity, integrity, and non-repudiation.
• Accessibility: Electronic records must be easily accessible for consultation and auditing.
• Security: Companies must implement appropriate security measures to protect electronic records from unauthorized access, modification, or deletion.

Sales tax rates

Brazil has a complex tax system with multiple taxes that can be considered “sales taxes”.

1. ICMS (Imposto sobre Circulação de Mercadorias e Serviços)

• This is the main state-level tax on the circulation of goods and services.
• Rates vary significantly between states, generally ranging from 17% to 19%.
• Interstate transactions have lower rates (4%, 7%, or 12%) depending on the states involved.

2. ISS (Imposto sobre Serviços)

• This is a municipal tax on services.
• Rates vary from 2% to 5% depending on the municipality and the type of service.

3. IPI (Imposto sobre Produtos Industrializados)

• This is a federal tax on manufactured goods.
• Rates are product-specific and can range from 5% to 15%.

4. PIS/COFINS (Contribuição para o PIS/Pasep e Contribuição para o Financiamento da Seguridade Social)

• These are federal social security contributions levied on company revenues.
• The combined rate is generally 3.65% for the cumulative regime or 9.25% for the non-cumulative regime.

Mileage

There is no official mileage reimbursement rate mandated by the Brazilian government. Unlike some other countries, Brazil doesn’t have a legal requirement for companies to reimburse employees for using their personal vehicles for work purposes.

However, it’s common practice for companies to offer some form of mileage reimbursement to their employees. The rates can vary significantly depending on several factors, including:

• Company policy: Each company sets its own reimbursement policy, considering factors like fuel costs, vehicle maintenance, and depreciation.
• Location: Fuel prices and other expenses can vary between regions in Brazil, influencing the reimbursement rate.
• Type of vehicle: The fuel efficiency of the vehicle used can also be a factor in determining the reimbursement rate.
• Negotiation: In some cases, the reimbursement rate might be negotiated between the employer and the employee.

While there’s no official rate, companies often calculate reimbursement based on factors like:

• Average fuel consumption: They consider the average fuel consumption of vehicles in their region or the specific vehicle used by the employee.
• Fuel costs: They track current fuel prices to determine the cost per kilometer.
• Other expenses: Some companies might also include allowances for other expenses like oil changes, tire wear, and vehicle depreciation.

Tax implications:

In Brazil, mileage reimbursement is generally not considered taxable income, as long as it’s reasonable and covers actual expenses incurred by the employee. There’s no specific tax-free limit set by the government, giving employers flexibility in setting their rates.