What is the best tax regime for your business

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Right at the beginning of the year, companies should opt for the framework that is most compatible with their reality,
important decision and that may result in an increase or reduction in tax costs. Tax planning ensures financial efficiency to any business, hence the opportunity to review the framework for calendar year 2022 should not be neglected. “The current crisis forces accountants and entrepreneurs to seek solutions involving cost reduction and simplification of taxes”, says the administrator, lawyer, accountant and author of the book Tax Planning: theory and practice, Silvio Crepaldi.

“The tax framework must be reassessed every year, as the operational, commercial and even
even tributaries can change depending on a wide range of factors, and vary from company to company.
company”, observes Terezinha Massambani, consultant and instructor for courses at Cenofisco.
Typically, past performance is the benchmark for making this decision, but the last two years
they can compromise the analysis due to the effects of the pandemic, reminds Crepaldi. Determine the average growth of last five years is the most recommended.

Another advice is to carry out the calculation by combining corporate and tax accounting “with the purpose of protecting the partners and the company and seek tax benefits”. Crepaldi stresses that it is always necessary to evaluate the relationship between cost and benefit. “There are legal alternatives valid for large companies, which are often unfeasible for medium-sized and small companies, given the cost of generating certain information”.

• Simple National

Companies with annual gross revenue of up to BRL 4.8 million can join the Simples Nacional, less regime
bureaucratic on account of the unification of eight taxes. In this model, taxation is levied on billing and not on
the profit. Despite being simplified, the inclusion in the Simples Nacional is not always the most advantageous. Crepaldi explains that you need to consider which attachment and range the company fits into. “Simple has five attachments and each one of them includes six tax brackets. Even the third track is still interesting. From the fourth track it is no longer advantageous”.

The attachment must also be noted from the aspect of opportunity. “In the Simples Nacional regime, depending on
of the annex to be framed, there will be advantages in relation to the contribution to the employer’s INSS on the
payment”, points out Massambani.

• Presumed profit

The presumed profit regime admits the adhesion of any company with sales of up to BRL 78 million and that
not required to be framed by actual profit. Massambani cites that it is an “advantageous model for
very profitable companies, as the basis for calculating the Corporate Income Tax (IRPJ) and Contribution
Social on Net Income (CSLL) will be a fixed percentage on sales, it being irrelevant that the company
have found higher profits”.

On the other hand, as the assumed profit considers the presumption of billing, it can be disadvantageous for
companies that are in a loss situation, as “there will always be a taxable calculation basis for IRPJ and
CSLL”, stresses the consultant. Crepaldi adds as a negative point of the presumed profit the impossibility of the
taxpayer use all the tax benefits to which it would be entitled.

• Real profit

Any company can opt for framing the actual profit, however, some are obliged to adopt it, such as
those listed in art. 257 of Decree No. 9,580/18. “In real profit, the adjusted accounting loss reduces the IRPJ and CSLL taxation to zero”, reveals Massambani. Per this is a form of calculation that benefits companies with low profit margins or tax losses. “The profit Real is for large companies, which have a slightly higher turnover, as they operate with lower margins profit, but they can obtain all the tax benefits, reducing the tax burden”, points out Crepaldi.

The counterpoint to the option for framing the actual profit is that there are more ancillary obligations to be
fulfilled. “One of the great challenges is the need for greater accounting control and care on the part of the entrepreneur and its collaborators, because in this regime, accounting needs to be impeccable and always up to date”, he endorses Massambani. “The ancillary obligations to be delivered to the tax authorities are more complex, demanding more investments in technology, equipment and training”

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