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CIDE - Remittances to Abroad

CIDE is an abbreviation for Contribuição e Intervenção no Domínio Econômico and relates to the economic domain intervention contribution and it applies to:

  • Royalty payments
  • Technology transfers
  • Compensation of technology supply
  • Technical assistance.

It is paid for by companies that import or commercialise items with assets covered by the tax. The current tax rate for CIDE is set at 10%

The name CIDE applies in other cases too like on the commercialisation of fuel and on telecommunication services, and the calculation differs.

Brazil is a country that has many taxes. The Contribuição sobre Intervenção do Domínio Econônomico (best known as CIDE) is an important and complex tax levied on some specific products in Brazil. Below will explain the main aspects of this tax and how it’s applied throughout the country.

What is CIDE? 

The contribution of CIDE is always for the improvement or activities linked to the sector in which it is intended for. 

The taxation of the contributions of Intervention in the Economic Domain has always been a subject of controversy within the National Tax Code.

With the 1988 Constitution The National Tax System established that such contributions are compulsory and therefore are taxes. The CIDEs, are used as an instrument of economic policy to deal with certain situations that require intervention from the State in the economy which is why some people find this ‘state tax’ questionable.

Types of CIDEs 

Several ways in which CIDEs work in Brazil and are in force today are shown in the table below.

CIDE - Remittances to Abroad

CIDE 

CIDE - Remessas para o Exterior/CIDE - Royalties or CIDE - Remittances to Abroad 

Taxable Event

Payments of amounts to residents abroad, by a source located in Brazil, such as

  • Payment of royalties
  • Technical services
  • Copyrights
  • Compensation derived from contractual obligations involving technology transference
  • Taxpayers

    Holders of use or exploitation licenses and signatories of TTA’s (technology transference agreements)

    Calculation Basis

    Value paid or remitted to abroad

    Rate

    10%

    Designation

    Financing of Science and Technology Programs, incentives for research technical innovation

    CIDE - Fuels

    CIDE 

    CIDE - Combustíveis or CIDE - Fuels

    Taxable Event

    Commercialisation and importation of oil, natural gas and others fuels for use in the internal market.

    Taxpayers

    Fuel Producers and/ or Importers.

    Calculation Basis

    Measure unity, the m³, ton. (metric cubed or ton)

    Rate

    Has a specific rate, an amount of BRL by m³ or by ton.

    Gasoline: 860.00 BRL per m³. 

    Diesel: 390.00 BRL per m³. 

    Kerosene (aviation fuel): 92.10 BRL per m³. 

    Fuel oils: 40.90 per ton. 

    Liquefied petroleum gas (LPG), including the one derived from natural gas and naphtha: 250.00 BRL per ton. 

    Ethanol Fuel 37.20 per m³. 

    Designation

    Financing for Projects for Transport Infrastructure and Payments of subsidies for fuels prices and transportation. Environmental projects.

    FUNTTEL 

    FUNTTEL or ‘Fundo para o Desenvolvimento Tecnológico das Telecomunicações’ is the fund for the technological development of telecommunication. It was created in 2000 to promote and encourage technical innovation in its field, stimulating the human resources capacity. It has been linked to encouraging job creation and providing access to capital in order to support small and medium companies. Inevitably this has increased the competitiveness of the telecommunication industry in Brazil.

    FUST 

    FUST is the abbreviated form for ‘Fundo de Universalização dos Serviços de Telecomunicações’, or the fund of universalization of Telecommunication Services. It was also created in 2000 to cover elements of spend to universalise telecommunication services.

    FUST and Funttel

    CIDE 

    FUST and Funttel 

    Taxable Event

    Generation of telecommunication for public or private services

    Taxpayers

    Service provider companies of telecommunication services in Brazil.

    Calculation Basis

    Companies gross revenue

    Rate

    1.0% for FUST
    0.5% for Funttel

    Designation

    Both are funds turned to the development and implementation of the telecommunication sector in Brazil This was done so as to make telecommunication services universal in the country.

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