The tax regime is what determines which taxes will be paid by a company and how it will be done.
There are 3 tax regimes: Actual Profit, Presumed Profit and Simplified.
Actual Profit
The Actual Profit is a tax regime in which the direct taxes are calculated based on the effective profit that the business had within the calculation period.
That means, the greater the profitability, the greater the amount of taxes to be paid. However, the opposite is also valid, that is, if there is no profit, or the company has a loss, it is exempt from paying taxes for that period.
Which companies can opt for Actual Profit?
Actual Profit can be the tax option of any company. However, businesses with revenues above $78 million (BRL) in the previous calendar year are required to be classified as Actual Profit.
Presumed Profit
The calculation of this tax regime is based on a fixed tax table, provided by authorities, for the direct taxes collection.
- Sale of goods or products: 8%
- Industrialization: 8%
- Rural Activity: 8%
- Transport services: 16% (cargo transport: 8%)
- Provision of services: 32%
- And so on …
Since 2026, Complementary Law 224/2025 increases these percentages by 10% on the portion of annual gross revenue above $5 million (BRL).
Which companies can opt for Presumed Profit?
Presumed Profit can also be used by any company, as long as they do not exceed $78 million (BRL) in annual revenue and are not otherwise required to adopt Actual Profit.
Simplified
Simplified is a tax regime created with the objective of assisting Small Businesses.
The main purpose of this tax regime is to facilitate the collection of taxes by these entrepreneurs. As a result, all taxes under this regime are calculated according to a progressive table, provided by authorities, and collected in a single monthly payment.
Which companies can opt for Simplified?
In order to qualify for Simplified, the company must comply with certain rules, which are:
- Small business only
- Annual revenue of up to $4.8 million (BRL)
- Activity qualified as Simplified by authorities
- And so on …