Sunnyvale, CA -- (ReleaseWire) -- 05/24/2012 -- New changes to the social security contribution for Brazilian employers may take effect from August 1, 2012, subject to Congress' approval.
Provisional Measure* 563/2012 was issued on April 4, 2012, introducing the following changes:
- Information technology (IT), Information and communication technology (ITC) and call center service companies will now pay 2% Contribuição Para O Instituto Nacional de Seguridade Social (INSS) instead of 2.5%. The rate will also be extended to the hotel industry sector.
- Furniture, leather, apparel and sports equipment manufacturers will now have to pay INSS at the rate of 1% instead of 1.5%.
Previously, the social security contribution due by employers at the rate of 20% on payroll was preventing them from recruiting new employees. In a bid to minimize the burden, the Government introduced a new tax on gross income for certain business sectors instead of the social security contribution. The latest measure is an amendment to this law.
- The Brazilian President can issue a Provisional Measure (PM) using his/her lawmaking power with a validity of 60 calendar days which can be further extended for another 60 days. If the issue does not get approved by the Congress, the PM would lose its power.
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