What is the difference between IRS and IRC?
Created by Lucas Luís at Wednesday, 9 April 2025
The difference between IR and IR lies in the type of taxpayer and the nature of the taxed income. Here is the explanation in a clear and direct way:
IRS – Personal Income Tax
Applies to: Individuals (natural persons and self-employed individuals).
Taxes: Personal income, obtained through dependent work (salaries), self-employment (provision of services), real estate income, capital, pensions, among others.
Calculation basis: Taxpayer's overall income, divided by categories (A, B, E, F, G, H).
Progressive: The more you earn, the higher the applicable rate (income brackets with increasing rates).
Examples: An employee, an individual doctor, or a landlord renting a property.
IRPJ – Corporate Income Tax
Applies to: Legal entities (companies, societies, cooperatives, associations, foundations, etc.).
Taxes: The company's taxable profit — that is, the income obtained minus the costs and expenses accepted for tax purposes.
Fixed rate: The general IRPJ rate is 21%, which may be increased by municipal and state surcharges.
Annual assessment: The company presents the accounts for the year (profits and losses), and tax is applied to this result.
Examples: A limited company (Lda), a SA or an agricultural cooperative.
Resume
Feature | IRS | IRPJ |
|---|---|---|
Applies to: | Individuals | Legal entities |
Taxed income: | Personnel (salaries, rent, services) | Profit from business activity |
Rate Type: | Progressive (up to 48%) | Fixed (21% + surcharge) |
Example of taxpayer: | Worker, liberal professional | Company, business society |
Articles that may be of interest to you:
Is the purchase of a car included in the IRS?
Car maintenance and repair in the IRS: what can be deducted?
