Every entrepreneur needs to know that in Brazil there are three types of tax regimes: Simples Nacional (Simplified Tax Regime), Lucro Presumido (Presumed Profit), or Lucro Real (Actual Profit). 

After learning about the Brazilian tax regimes and finding out which one best suits your company, check out 7 important tips for entrepreneurs on tax rules in the country. 

Seek specialized guidance: 

Due to the complexity of tax rules and their constant changes, it’s essential to have the support of a lawyer specialized in tax matters. They can provide personalized guidance and help interpret tax laws correctly, avoiding errors that could result in penalties or excessive tax payments. 

Know the main taxes: 

Companies need to comply with tax legislation and fulfill obligations related to issuing invoices and paying taxes. Therefore, familiarize yourself with the main taxes that apply to business activities in Brazil. 

This includes taxes such as ICMS (Tax on Circulation of Goods and Services), IRPJ (Corporate Income Tax), IPI (Tax on Industrialized Products), ISS (Tax on Services), PIS/COFINS (Social Contribution Taxes), and CSLL (Social Contribution on Net Profit). 

Understanding how these taxes work and what their rates are is essential for correctly calculating the company’s tax obligations. 

Stay updated: 

Stay alert to changes in tax legislation. Rules may be changed by the government, affecting your company’s tax obligations. Keep up with updates and stay informed about relevant changes. This can be done through specialized publications, participation in events, and regular consultations with your accountant. 

Maintain financial and accounting control: 

It’s essential to maintain adequate financial and accounting control to ensure the accuracy of tax information. This includes keeping updated records of all financial transactions, issuing invoices correctly, tracking revenues and expenses, and keeping accounting records in compliance with established standards. 

Be aware of deadlines and pay taxes correctly: 

It’s important to calculate and pay taxes according to the rules established by the chosen tax regime. Be aware of applicable rates, payment deadlines, and tax collection methods. 

Failure to comply with deadlines and established rules may result in fines and penalties. Maintain an organized tax calendar to ensure you don’t miss any important dates. 

Avoid irregular practices or tax evasion: 

It’s crucial to avoid practices such as revenue omission, document forgery, or engaging in illegal transactions. These practices can lead to serious consequences, including the possibility of being audited and facing tax and criminal sanctions. 

Be prepared for inspections: 

Tax authorities may conduct inspections at your company at any time. Be prepared and keep all tax and financial records updated and in compliance. This includes keeping invoices, proof of tax payments, and related documents. 

Seeking guidance from a specialized legal advisory is essential to ensure compliance with tax rules in Brazil. Get to know our team of experts.