How to Choose the Ideal Tax Regime for Your Company

Efficient tax management is essential to ensure the financial sustainability of any company. In Brazil, the total collection of federal revenues reached R$ 2.652 trillion in 2024, reflecting the complexity of the tax system. Choosing the ideal tax regime can directly impact your business’s profitability and competitiveness.

In this article, we will explore the main tax regimes and how to determine the most suitable one for your company, taking into account factors such as revenue, profit margins, cash flow, and changes in legislation.

Main tax regimes in Brazil

Brazil offers three main tax regimes for companies:

1.Simples Nacional

Designed for micro and small businesses with annual revenue of up to R$ 4.8 million, Simples Nacional consolidates the payment of various taxes into a single document, simplifying compliance with tax obligations. Tax rates vary based on the economic activity and revenue range.
Advantages:

• Less bureaucracy;
• Reduced tax costs for certain activities;
• Ease of tax payment.
  Disadvantages:
• May not be advantageous for companies with low profit margins;
• Restrictions on certain economic activities;
• Annual revenue limitation.

2.Lucro Presumido (Presumed Profit)

Suitable for companies with annual revenue of up to R$ 78 million, Lucro Presumido uses a predefined tax base for calculating IRPJ and CSLL, depending on the type of activity. This option can be advantageous for companies with profit margins higher than those set by the government.
Advantages:

• Simpler regime compared to Lucro Real;
• Potential for reduced taxation for companies with high profit margins;
• Fewer accounting obligations.
  Disadvantages:
• Does not allow compensation for tax losses;
• Tax burden may be high for companies with lower margins;
• The government’s fixed tax base may not reflect the business’s reality.

3.Lucro Real (Actual Profit)

Mandatory for companies with annual revenue exceeding R$ 78 million and for specific sectors, Lucro Real uses the company’s actual profit as the tax base for IRPJ and CSLL.
Advantages:

• Allows compensation for tax losses;
• Can be more advantageous for companies with reduced profit margins;
• Financial and tax transparency.
  Disadvantages:
• Requires rigorous accounting and greater complexity in calculations;
• Higher volume of ancillary obligations;
• May result in higher accounting costs.

How to choose the ideal tax regime?

Choosing the tax regime should be based on a detailed analysis of the company’s finances, considering:

• Annual revenue: Assess gross revenue to verify available options.
• Profit margin: Companies with high margins may benefit from Lucro Presumido, while those with lower margins may prefer Lucro Real.
• Tax cost: Compare rates and the effective tax burden of each regime.
• Operational complexity: Simples Nacional can be advantageous for those seeking less bureaucracy, while Lucro Real requires more accounting rigor.
• Impact on cash flow: Evaluate the frequency of payments and the predictability of tax costs.

Stay attentive to changes in legislation

The Tax Reform scheduled for 2026 promises significant changes to the Brazilian tax system, including the replacement of current taxes with new ones. Companies must closely monitor these changes to plan their taxation strategically.

Additionally, states and municipalities often offer tax incentives for specific sectors and regions, reducing the tax burden and improving companies’ competitiveness. Staying alert to these opportunities can generate significant savings.

Conclusion

Tax planning is fundamental to ensuring fiscal efficiency and your company’s financial health. Correctly assessing the tax regime, keeping up with legislative changes, and relying on specialized advisory services are essential steps to optimize costs and avoid risks.

If you are seeking strategic tax management, Conmax, an accounting firm with offices in São Paulo and Fortaleza, can help your company choose the ideal tax regime, ensuring compliance and savings. Contact us and discover how we can optimize your tax burden.