Return to Taxes


Services Tax (“ISS”)

ISS is a municipal tax levied on the supply of any type of services, as defined in federal Supplementary Law (LC). This tax is currently governed by Supplementary Law (LC) no. 116/03.

The rate of ISS varies between 2% and 5%.

ISS is due generally for the Municipality where the establishment rendering services is located. The following exceptions are determined in LC no. 116/03:

  • civil construction
  • services acquired abroad
  • sweeping and collection of garbage services treatment of effluents
  • environmental sewage
  • forestation
  • parking security
  • storage
  • amusement services

As of January 2004 the ISS tax is due over the purchase of foreign services, the Brazilian beneficiary thereof being liable for the payment of the tax, in addition to its levy over exports of services when the results occur in Brazil (despite that the payment is made by a foreign resident).

Law No. 14042/2005 introduced the mandatory registration of services providers domiciled in other municipalities with the Treasury Department of the City of São Paulo. Service providers that fail to comply with this accessory obligation will be subject to the withholding of the ISS by the respective client, meaning that the tax will be collected to the Municipality of São Paulo, regardless of the possible payment of the tax to the Municipality where the service company is located. Upon the registration, the legal entity is obligated to provide evidences that it is in fact domiciled in other municipalities.