CSSL (Social Contribution on Net Corporate Profits; Contribuição Social sobre o Lucro Líquido)
In addition to Corporate Income Tax (IRPJ) the Brazilian companies are subject to the payment of the social contribution on the net profit (“CSLL”). CSLL is charged separately form the IRPJ, given that the CSLL is paid to the social security and not to the federal government, to whom the IRPJ tax is paid. The tax basis of the CSLL is the net profit specifically calculated for the CSLL payment purposes. The Social Contribution on Net Profit focuses on the legal persons and entities treated by the law of income tax and is intended for the financing of Social Security. Its rate varies between 10% and 12% and the calculation basis is the value of net income, before provision for income tax .
The social contribution is payable by legal entities as follows:
- SIMPLE opted by corporate entities pay income tax , COFINS , social contribution , PIS and other taxes unified
- People opting for legal taxable income: the rate of 9% will be applied on the EBT (Earnings before Income Tax)
- People opting for legal presumed profit and profit arbitrated: rate of 9% applied on the profits of the enterprise. This profit is obtained by applying the percentage of estimated income (profit and arbitrated) present in the table which follows below, on the gross income :
- Net economic activity
- For 12% of revenue activities commercial , industrial , real estate and hospital
- If 32% of revenues from services in general, except for hospital services.
Payment is made around the 15th of each month
The calculation basis for CSLL is susceptible to calculation upon definition of the taxable income or assumed profit (upon application of the percentage that varies pursuant to the activity performed, being such percentage applicable on the gross revenue obtained by the legal person), as per the criterion defined by the taxpayer.
Similar to IRPJ, the taxpayers that have adopted the Taxable Income may calculate the CSLL on an annual or quarterly basis. In the event the calculation of the CSLL is on an annual basis, the payments must be made based on an estimate. The CSLL contributions can no longer be deducted from the net profit for the purposes of calculating IRPJ.
The negative tax basis of the CSLL (tax loss for CSLL purposes) may be used to offset the taxable profit in the subsequent periods, limited to 30% of the taxable profit in each calculation period. Similar to what occurs in regard to the tax loss for IRPJ purposes, the negative tax basis of the CSLL may be used by taxpayers that have adopted the taxable income to offset a future taxable income, without a transient limit for the expiration for usage of these amounts.
For the taxpayers that have adopted the assumed profit method, the calculation for CSLL takes place on a quarter basis, constituting the calculation basis of 8% over the gross income (however, such percentage for calculation of the assumed profit varies between 8% and 32%, depending on the specific activities carried out by the company). The rate of 9% is applicable to the assumed profit.