Sunnyvale, CA -- (SBWIRE) -- 05/24/2012 -- New changes to the social security contribution for Brazilian employers may take effect from August 1, 2012, subject to Congress' approval.
Provisional Measure* 563/2012 was issued on April 4, 2012, introducing the following changes:
- Information technology (IT), Information and communication technology (ITC) and call center service companies will now pay 2% Contribuição Para O Instituto Nacional de Seguridade Social (INSS) instead of 2.5%. The rate will also be extended to the hotel industry sector.
- Furniture, leather, apparel and sports equipment manufacturers will now have to pay INSS at the rate of 1% instead of 1.5%.
Previously, the social security contribution due by employers at the rate of 20% on payroll was preventing them from recruiting new employees. In a bid to minimize the burden, the Government introduced a new tax on gross income for certain business sectors instead of the social security contribution. The latest measure is an amendment to this law.
- The Brazilian President can issue a Provisional Measure (PM) using his/her lawmaking power with a validity of 60 calendar days which can be further extended for another 60 days. If the issue does not get approved by the Congress, the PM would lose its power.
Please call/email for more details.
Get the latest press releases and updates on international tax, compliance and other legal news at Nair & Co. Industry Alerts.