Tax | Brazilian Agribusiness Companies May Avoid Double Taxation of Their Income

Brazilian agribusiness companies that pay two taxes on their gross revenue (known as PIS/COFINS and FUNRURAL) may seek in court the removal of the FUNRURAL tax.

The legal foundation is precisely the undue taxation of the same base (gross revenue) by two different taxes, which characterizes double taxation. 

Recently, the Federal Superior Court of the 4th Region, which congregates the states of Rio Grande do Sul, Santa Catarina and Paraná, confirmed this understanding. But there are decisions along the same lines in other regions.  

In the specific case, the company is a family holding company whose economic activity is the cultivation (planting, cultivation and sale of its own production) of grains and cereals, as well as the creation and sale of cattle.  

Currently, FUNRURAL is a social contribution that is levied at a rate of 1.7% on gross revenue from the sale of its production. And, in turn, PIS/COFINS can reach up to 9.25% in some cases, as there is the possibility of some deduction and credits. In this case, there was even an injunction granted to remove the payment of the tax immediately. However, it is necessary to go to court in order to avoid the collection of this tax.  

It is suggested that companies in the sector analyze in detail their taxation to seek greater efficiency.


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