Brazilian companies paying for foreign software and services: IRRF, CIDE, PIS/COFINS-import and IOF

A São Paulo retailer signs a US$10,000 contract with a Lisbon consultancy for an e-commerce platform audit. The finance team budgets US$10,000. By the time the payment leaves Brazil, IRRF has been withheld, CIDE and PIS/COFINS-import are due, the municipality wants ISS, and the exchange carries IOF. The Lisbon consultancy, meanwhile, expects to receive the full US$10,000 because the contract was grossed up.

The taxes that can apply

On services bought from abroad, a Brazilian company may face:

• IRRF (withholding income tax): often 15 percent, higher for payments to low-tax jurisdictions, and reduced or reshaped by tax treaties.
• CIDE: 10 percent on payments for technical services, technical and administrative assistance, and royalties.
• PIS/COFINS-import: federal contributions on imported services.
• ISS: the municipal service tax, on many imported services.
• IOF: on the foreign exchange conversion when the payment is made.

Which apply depends on the type of service, the supplier's country and how the contract is written.

Gross-up changes who pays

Foreign suppliers usually expect to receive the invoiced amount. If the contract is grossed up, the Brazilian company pays the withholding on top of the price, and the effective cost rises well above the headline figure. Negotiate with the full cost in view.

Software is its own category

The tax treatment of software has shifted through court decisions and rulings. Standardised software licences, customised development and software delivered as a service can be treated differently. For significant contracts, get a written view from your accountant before signing.

The 2026 reform

Brazil's consumption tax reform began phasing in from 2026, with CBS and IBS gradually replacing PIS, COFINS, ICMS and ISS over several years. Imports of services move into the new system as it phases in, so the list above will change year by year.

Documents

Keep the contract, invoice, proof of tax payments (DARFs) and the exchange contract or payment proof for each remittance. They support deductions and answer questions from the Receita.

Paying into Brazil: the local rail

Source: Banco Central do Brasil: Pix. Checked when this guide was last updated; the scheme's own page has the current figures.

Where Rivet fits

Rivet does not calculate or pay Brazilian taxes. A Rivet business account accepts registered companies after verification, including Brazilian companies, and pays suppliers in 120+ countries from balances such as dollars kept abroad as export proceeds. Each payment shows its rate before you confirm and is matched to the invoice. Rivet is not a bank; regulated partner institutions hold the funds. Confirm the tax position with your accountant first.