Know that it is possible to reduce your tax and duty expenses without evading and staying in good standing. Click here and find out how!
Lara Zanesco | 07/17/2023
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Many independent professionals start their activities without knowing how to pay less taxes. In Brazil, there are different tax regimes for legal entities (PJs) and this directly impacts the amount of taxes you must pay.
In this regularization process, you may end up not making the best choices due to a lack of information and professional assistance . But Hero is here to help you throughout your entrepreneurial journey, so I created this content to explain how to reduce taxes as an individual contractor:
How to pay less taxes as a legal entity?
How much tax do companies pay?
Which legal entity pays less tax?
Let's go!
How to pay less taxes as a legal entity?
Everyone pays taxes in Brazil, whether they are individuals or legal entities. As a legal entity, you need to know how to pay less taxes so that you don't end up spending on unnecessary charges, while always staying in good standing with the official bodies.
Now, see 7 tips to legally reduce your company's taxes, optimizing your tax management:
1- Do tax planning
Tax planning is the organization of all your tax obligations. This allows you to calculate the taxes you have to pay as a legal entity and the variables for a given year.
In this planning, you need to consider everything that impacts the taxes you will have to pay: market niche, classification, company size, etc.
It must be in line with your business's overall financial planning. Therefore, it must be considered together with other fixed and variable costs and be covered by financial inflows. This even helps you define the profit margin you need to apply to the services and products you sell.
2- Choose the ideal framing
As I mentioned, your classification will impact the taxes you will pay, so you need to be careful when choosing the right type of company when opening your CNPJ. This is what will define whether you fit into the Simples Nacional, Lucro Presumido or Lucro Real .
To learn more: 6 Types of companies to open in Brazil .The Simples Nacional is the most common for those starting a business and the positive side is that it has simplified payment. All charges are unified in the same guide, the DAS (Simples Nacional Collection Document). This is the document that the MEI pays every month, for example.
If you have been in the market for a while, you can also change your category. For example, you can change from MEI to Microenterprise or vice versa. You can also change to other categories with a higher tax regime if your revenue exceeds the stipulated limits for microenterprises and microentrepreneurs.
Ideally, you should work with an accountant or lawyer to ensure you choose the best framework for your business.
3- Pay everything correctly
Anyone who thinks they need to evade taxes to pay less as a legal entity is mistaken. Tax evasion is a crime and should never be an option if you want to maintain a serious, regular and credible business.
But it is worth noting that tax evasion goes beyond simply not paying taxes, whether due to forgetfulness, lack of knowledge or intentional. If you register a CNAE that is different from your actual activity just to pay less tax, this is also a form of tax evasion.
Failure to issue an invoice is also a factor that puts you at risk, as you end up not declaring your income.
Once you are in debt with the IRS, the tax authorities may come knocking on your door and you may be subject to fines that are much more expensive than the original amount of the charges.
4- Don't miss payment deadlines
In addition to paying all taxes, it is very important to pay them on time. Delays generate fines and interest , which end up impacting your business's finances. To do this, it is important to have your tax planning up to date, as I explained in the first tip.
To help you with this process, it is also worth hiring an accounting firm. They can guide telemarketing leads, iran telephone number data you both when starting your business and if you want to carry out an inspection to make sure that you are up to date with your legal obligations.
5- Have defined and secure processes
In addition to planning, it is important to have routine processes in place to pay less tax as a legal entity. This routine ensures that you stay up to date with your tax obligations with the Federal Revenue Service.
One simple thing that makes a big difference is to separate your physical account from your corporate account . There are many free account options for entrepreneurs that make it easier to pay taxes and even employees, if you have any.
6- Pay attention to changes in the tax calendar
Yes, it is possible and even common for there to be changes in the tax calendar throughout the year. Changes in payment deadlines or even new obligations may arise and you need to be aware of them to stay regular and up to date.
In this process, the help of an accountant or lawyer specialized in taxation is also very welcome. Always have access to a professional to ensure that your company's taxes are up to date.
How much tax do companies pay?
The amount varies according to your tax regime. The minimum amount to be paid is the MEI tax, which is currently R$67, the minimum amount for commerce and industry, and varies for other activities as well.
Which legal entity pays less tax?
The category that pays the least taxes is the Individual Microentrepreneur . The fee paid through the DAS form represents 5% of the current minimum wage, currently R$66, plus the amount of tax on the type of activity you perform.