The choice of the tax regime is one of the most strategic decisions for any company. Among the options available in Brazil, Presumed Profit is one of the most adopted, especially by businesses looking for a simplified tax system and having high profit margins.

In this article, we will explain what Presumed Profit is, what taxes are involved, its advantages and disadvantages, and how to correctly calculate the taxes.

What is Presumed Profit?

Presumed Profit is a simplified tax regime where the Federal Revenue defines a fixed percentage of revenue as the company's profit. With this presumption, the calculation of taxes does not need to be made based on the actual profit ascertained, facilitating tax management.

Who can opt for Presumed Profit?

To adhere to this regime, the company must meet the following requirements:

• Annual revenue of up to R$ 78 million;

• Not operate in restricted sectors, such as financial activities and banks.

Unlike Actual Profit, where taxes are levied on the actual net profit, Presumed Profit simplifies the calculation and provides predictability in tax payments.

Which Taxes are Levied on Presumed Profit?

The tax regime of Presumed Profit involves monthly and quarterly assessment of different taxes.

Monthly Assessment:

• PIS (Social Integration Program): 0.65% on revenue.

• COFINS (Contribution for Social Security): 3% on revenue.

• ISS (Service Tax): From 2.5% to 5%, depending on the city and service provided.

Quarterly Assessment:

• IRPJ (Income Tax): 15% on the presumed profit base.

• CSLL (Social Contribution on Net Profit): 9% on the presumed base.

Profit Presumption Rates

The profit presumption varies according to the activity of the company:

Activity and Presumption Rate:

• Resale of fuels and gas: 1.6%

• Cargo transport: 8%

• Manufacturing of products: 8%

• Other unspecified activities: 8%

• Professional services: 32%

• Business intermediation: 32%

• Civil construction: 32%

Activity Presumption Rate Resale of fuels and gas 1.6% Cargo transport 8% Manufacturing of products 8% Other unspecified activities 8% Professional services (law, engineering) 32% Business intermediation 32% Civil construction 32%

How to Calculate Taxes on Presumed Profit?

Let's illustrate the calculation of taxes with a practical example:

Example: An engineering company had a quarterly revenue of R$ 36,000.00.

1. PIS (0.65%): R$ 234.00

2. COFINS (3%): R$ 1,080.00

3. ISS (5%): R$ 1,800.00

4. Profit Presumption: 32% of R$ 36,000.00 = R$ 11,520.00

5. IRPJ (15%): R$ 1,728.00

6. CSLL (9%): R$ 1,036.80

Total quarterly taxes: R$ 5,878.80

Difference between Presumed Profit, Actual Profit, and Simples Nacional

Main Characteristics:

• Presumed Profit: Revenue up to R$ 78 million, fixed presumption on profit.

• Actual Profit: No revenue limit, taxation based on actual profit.

• Simples Nacional: Revenue up to R$ 4.8 million, simplified tax system.

Characteristics Presumed Profit Actual Profit Simples Nacional Maximum Revenue Up to R$ 78 million No limit Up to R$ 4.8 million Calculation Base Presumed percentage Actual profit ascertained Annual gross revenue Bureaucracy Medium High Low Ideal Profile Companies with high profit margin Companies with high costs Small and medium-sized enterprises

Accessory Obligations in Presumed Profit

Companies under Presumed Profit must comply with various accessory obligations, including:

• Digital Tax Reporting (EFD);

• Declaration of Federal Tax Debts and Credits (DCTF);

• Transmission of IRPJ and CSLL information;

• Issuance of invoices;

• Digital Accounting Reporting (ECD).

Advantages and Disadvantages of Presumed Profit

Advantages:

• Simplification in tax calculation: Does not require proof of actual profit.

• Predictability: Facilitates financial planning.

• Lower rates for PIS and COFINS: Compared to Actual Profit.

• Less bureaucracy: Ideal for companies with a lean administrative structure.

Disadvantages:

• Fixed presumption: May result in taxation exceeding actual profit in periods of low profitability.

• No utilization of tax credits: As occurs in Actual Profit.

• Social Security on payroll: 20% on payroll may increase operational costs.

When to Choose Presumed Profit?

Presumed Profit is ideal for companies that have high profit margins and low tax complexity. Before opting for this regime, it is important to consider:

• Company's financial performance;

• Expected profit margin;

• Available administrative structure;

• Field of activity.

The tax regime of Presumed Profit can be an excellent choice for companies seeking simplicity and efficiency in fiscal management. However, periodically re-evaluating this option is essential to ensure that your company is not paying more taxes than necessary.

Want to make more strategic tax decisions? Contact Beorange and find out how we can help you optimize your tax operation and ensure intelligent and efficient financial management!