The tax department has issued guidance clarifying that revenues from the sale of products to trading companies for the purpose of export are subject to social security taxation.
Normative Instruction 1436 (IN 1436) released on 9 January 2014 was immediately challenged by lawyers who noted that Article 149 of Brazil’s constitution states that company revenues from exports are not subject to the country’s social security tax. According to IN 1436, however, only revenues from “direct exports” are exempt from paying the tax and the sale of products to traders for the purpose of export is therefore subject to the social security tax.
