The simplified tax regime


for Micro and Small Business


§73. The simplified tax regime (SIMPLES) is a way of the State charge, by one simple document, at once, eight taxes [ IRPJ (Income Corporate Tax), CSLL (Social Contribution on Net Profits), PIS/PASEP (Contribution to the Program of Social Integration/ Patrimony Formation of Public Employee), COFINS (Contribution for the Funding of the Social Security), IPI (Impost on Industrialized Products), ICMS (Impost on the Circulation of Goods and Some Services), ISSQN (Impost on Services of Any Nature), CPP (Contribution of the Employer for the Social Security)]. First, for a legal entity use this tax regime it is necessary observes the economical size of the business. Only microbusiness and small companies can use it, being a micro company that one with gross profit minor or equal R$ 360.000,00/year, and being a small company which one that has a gross profit minor or equal R$ 4.800.000,00/year (Complementary Law 123/2006). Second, only the gross profit will be considered as calculation basis (costs and expenses are not considered), being a kind of estimated regime. Thirdly, the percentage is variable according the gross revenue and the specie of economical activity, e.g., a law office that had a gross revenue of R$ 1.000.000,00 will pay a rate of 14% minus a fixed value of almost 40.000,00 (Complementary Law 123/2006, Article 18, 5ºC, VII, Attached IV). But the SIMPLES is not always the best kind of regime to be choose by a small business – in activities where the costs and expenses are more higher, maybe the real tax regime can be better if the revenue it is enough to pay the accountant’s fee, higher because the accountant's service complexity for a tax regime of real profit is higher.


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Rafael De Conti, Rafael Augusto De Conti, Brazilian Tax Lawyer, Lawyer in Brazil