Tax and accounting security: why foreign companies should hire an accountant?

The services of an accountant can help companies to comply with local legislation


In the latest ranking of the Tax Complexity Project, which evaluated the tax complexity of 100 countries, Brazil ranks first. For the local population, the result of the survey confirms a general feeling. The Brazilian accounting and tax system is confusing and bureaucratic, being a headache for legal entities.

According to data from the Federal Revenue (RF), each year, tax collection costs R$150 billion to companies, exceeding 32% of the GDP (Gross Domestic Product). In February, the amount reached R$148.664 billion, the highest value in the historical series and amid record inflation.

The creation of a single tax in Brazil has been debated for years. The Proposed Amendment to the Constitution (PEC) 110/19, for example, aims to unify five taxes – PIS (Social Integration Program), Cofins (Contribution for Financing Social Security), IPI (Tax on Industrialized Products), ICMS (Tax on Circulation of Goods and Services) and ISS (Service Tax) – in the Goods and Services Tax (IBS).

The division of the Brazilian tax system makes it even more difficult to meet tax obligations. Taxes are levied by federal, state and municipal governments. In addition, states and municipalities have independence to regulate the collection of their own taxes. If, for Brazilian companies, understanding this system is already complicated, imagine it for foreign companies.

In this complex and ever-changing landscape, the services of an accountant can help companies to comply with local legislation. Especially foreign companies that operate or want to operate in Brazil can benefit from the work of a professional in the accounting area, whose expertise saves time and effort of its clients.

In fact, even before generating revenue, these companies have a series of obligations to fulfill. Here on the blog, we have already written about the delivery of the annual DCTFWeb (Declaration of Federal Social Security Tax Debits and Credits and Other Entities and Funds) and about the suspension of the CNPJ (National Registry of Legal Entities) of companies with outdated registration. There are still many others, such as the EFD-Contribuções, a digital file for recording contributions to PIS/Pasep and Cofins, and the GFIP (FGTS Collection and Social Security Information guide).

The many tax obligations and the bureaucracy involved in the process require in-depth knowledge of the Brazilian regulation. Any detail that escapes the attention can have serious consequences for companies on the part of the competent bodies. Having the support of an accountant guarantees that these companies can legally operate in Brazil.

Count on Pryor Global to help you with this challenge. With 26 years in the market, our team of experts understands the complex local tax and accounting system and has helped hundreds of clients to comply with local laws. Contact us for more information.

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