Pis and Cofins, first, let's understand what each term means, "Cofins" means "Contribution to finance Social Security", and the term "Pis" "Social Integration Program", we will understand throughout this article everything about the main contributions in Brazil .
Bearing in mind that the tax burden in Brazil is very high, many companies are in doubt as to which taxes they really need to pay, because they have to pay fees, contributions and taxes, so that they can be fully active, without major problems with the government's.
In case of Pis and Cofins, are taxes that all companies must pay, as provided for in Complementary Law No. 7, which was enacted on September 7, 1970. The first article, provides for exactly that, the integration of workers along with the growth of companies.
What is Pis and Cofins
It is nothing more than tributes that go together, but it must be remembered that they are two totally different tributes. For this reason, let's see what are the main characteristics of the two tributes, in order to understand their main differences.
Pis aims to integrate the worker with the company, that is, the worker's life needs to accompany the development and growth of the company, for this very reason, it is a very important tribute, which has been working very well since its creation in 1970 .
And Confins, is also a supplementary law of nº 70, which was enacted on December 30, 1991. This tribute does not cause any damage to Pis, nor to Pasep, its main objective is the social security that can be better understood in item 1 of article 195 of our “Federal Constitution”.
Main difference between Pis and Cofins
The main difference between these two taxes is that the destination of the duly collected resource is completely different, although they have the same basis for calculating. Therefore, it is important to understand mainly the allocation of these resources.
In the case of Pis, for example, it is totally intended to promote and integrate the individual into society, in this case, the beneficiaries are the workers with this resource. Cofins, on the other hand, is nothing more than a contribution to finance social security, in this case it includes social and social security assistance, in addition to public health.
In short, Pis is aimed at promoting and integrating the individual into society, and Cofins is a contribution whose objective is to ensure that Brazilian workers are involved in all areas of their lives, so that they can be useful to the company and be useful for society as well as for your family and personal life.
Who should pay these taxes?
To understand better, when it is necessary to pay Pis and Cofins, it is necessary to understand some concepts. See below:
- Calculation basis: total revenue collected by a legal entity
- Taxable event: receipt of revenue by the company.
- Taxpayers: companies taxed by ”Simples”, that is, small companies.
Calculating taxes
To correctly calculate Cofins and Pis, it is necessary to observe the cumulative effect, which can be cumulative or non-cumulative. It is necessary to be aware of this detail, as it will make all the difference in the final result, due to the way of calculating
In the case of cumulative incidence, there is no appropriation of credits, whether charges, expenses or costs. To use this regime, the company needs to calculate the income tax, in the form of arbitrated profit or presumed profit. This is information to always remember.
In this case, the PIS rates are 0.65%, and the Cofins rates are 3%, it is worth remembering that to make the correct calculation of PIS and Cofins in the case of cumulative incidence, you must always multiply your gross revenue by the aforementioned rate above. Stay tuned.
Non-cumulative incidence
In the case of non-cumulative levy, unlike the first, the appropriation of credits always happens, related to the expenses, costs and charges of the company, in this case, the form of taxation must be the actual profit, in this way, with some exceptions, the rates are de1.65 % for Pis and 7.6% for Cofins.
To make the calculation correctly, it is necessary to consider the billing and also all the purchases made in the period, because the billing will incur this rate of 1.65% relative to PIS, and in the case of purchases, 1.65 % will also be levied, in the end it is enough deduct the Pis of the purchase from the Pis of the billing.
However, for purchases, 7.6% will also apply, then just take the result of billing and reduce the result of purchases in this way, finding the final value of ”Confins”. Access our apps category for more information. Good luck!