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Comment by ramonlima | Hacker News Reader

The maximum tax quota is 60% by the Correios, which is simple Taxing, the other quotas are from 1% - 50% depending on the product type.

What happens a lot of times is that the business guys want to say that it's "too hard" to do business here where it actually is pretty easy, not too much taxes and a great market. There's the employee taxes which are the most expensive but some of the taxes you can get back if you're smart enough with your accounting.

It's a great place to live and to have a business, the best part is that Brazilians like new things, when you open your business everyone is coming in to see what's it about.

Best,

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Nope, I'm brazilian and have worked with company taxes while launching a startup. You're talking mostly about natural persons import taxes based on Correios importation.

What you are not seeing is: we have a pretty complex tax structure based on the kind of product/service you are providing. Also, we have a pretty bureaucratic import process, have you ever tried to deal with Port Customs over here? You have a 7 step process, each one involving some tax or payment to be made to one or other agency.

It's very hard too when the rules are always changing, when I opened the juridical person for my startup I had to contact a lawyer and an accountant to get the best deal on taxes for the service that I was providing, some months later the rules had changed and I'd to pay around 8% more on taxes than if I went as another type of company.

So yes, it's pretty hard to do business over here, you need to have a competent lawyer and accountant just to get your company out of the ground, like, reaaally in the beginning.

And this complexity doesn't end there because, in order to deal with these heavy employee taxes, it's not uncommon for IT companies to ask employees to open their own one-man companies to avoid these taxes. Now having a B2B relation, the company is free from these taxes and mandatory benefits, and the employee now deals with it declaring himself as the only employee and paying himself minimum wage on paper, receiving the rest of his salary as company's profit. Or the scheme they call flex, which is to pay a great deal of the salary as extras (even up to 80%) because these do not get taxed. The employee, in turn, needs to declare expenditures to his contractor in order to receive this extra share.

The real meaning of "being smart enough with your accounting" seems to me mostly finding these loopholes in the tax structure to avoid leaking money to the government.

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