Let’s break down the differences between these regimes and help you make the right choice. Check it out!
Presumed Profit:
In the Presumed Profit regime, taxation is based on a pre-determined profit margin established by law for each economic activity. This regime is advantageous for companies with annual revenues of up to R$ 78 million, offering simplified tax management and potentially lower tax burdens.
Here are the rates used to calculate the presumed profit margin, as defined by Brazilian tax law:
Commerce and Industry:
- 8% of gross revenue for companies not engaged in specific activities.
- 1.6% of gross revenue for companies engaged in specific activities, such as fuel retail, vehicle sales, freight transportation, and more.
General Services:
- 32% of gross revenue for companies not engaged in specific activities.
- 16% of gross revenue for companies engaged in specific activities, such as hospital services, intercity, and interstate passenger transportation, among others.
Business Intermediation:
- 16% of gross revenue for companies not engaged in specific activities.
- 8% of gross revenue for companies engaged in specific activities, such as property management on behalf of third parties, brokerage, and intermediation of leasing agreements, among others.
It’s important to note that these rates are applied to the company’s total gross revenue, not actual profit. They determine the company’s presumed profit, which is then subject to Income Tax (IR) and Social Contribution on Net Profit (CSLL).
Actual Profit:In the Actual Profit regime, taxation is applied to the company’s actual net profit, calculated after allowable deductions under tax law. This regime is more complex and requires detailed accounting, making it suitable for companies with narrower profit margins or annual revenues exceeding R$ 78 million.
Key Differences:
- Presumed Profit: Simplified taxation based on a presumed profit margin.
- Actual Profit: Taxation on actual net profit, requiring detailed accounting.
When to Choose Each Regime?
- Presumed Profit: Ideal for companies with high profit margins and annual revenues up to R$ 78 million, seeking simplicity in tax management.
- Actual Profit: Recommended for companies with tighter profit margins, needing detailed accounting, and annual revenues above R$ 78 million.
We’re here to help you make the best decision for your business. Contact us for personalized consulting and ensure efficient tax management!