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Paying taxes under the Simples Nacional tax regime

Subnational Doing Business in Brazil 2021 includes a pilot study designed to analyze the process of paying taxes under the Simples Nacional tax regime. This pilot study covers five locations in Brazil (Amazonas, Ceará, the Federal District, Minas Gerais, and Rio Grande do Sul), analyzing two scenarios of firms that opt for this tax regime: a micro commercial business and a small manufacturing business. These two scenarios were selected to cover the situation of both micro and small firms under this tax regime. This section describes the case study assumptions and the methodology used to collect these data. Scores are not calculated for this pilot study. This data was not included in the aggregate ease of doing business score for the five topics covered in this report. Read more about the methodology.

Also available in Portuguese.

 

Data overview

Data as of: December 31st, 2019

 Commercial microenterpriseSmall industrial firm
Payments (number per year)77
Time (hours per year)66.5536.0
Total tax and contribution rate (% of profit)The TTCR varies per location, as follows:The TTCR varies per location, as follows:
Amazonas (Manaus)58.6227.5
Ceará (Fortaleza)58.8228.2
Federal District (Brasília)58.9227.9
Minas Gerais (Belo Horizonte)60.0228.5
Rio Grande do Sul (Porto Alegre)59.1227.9
Postfiling processes*--

*This pilot study applied the Doing Business paying taxes indicators to measure postfiling processes applicable to companies paying taxes under Simples Nacional. Scores for a postfiling index were not calculated due to differences in case study assumptions.

VAT refundsCommercial microenterpriseSmall industrial firm
Does VAT exist?Yes. Taxes similar to VAT are charged and are included in the Simples Nacional combined payment (ICMS, PIS and COFINS apply to this study)Yes. Taxes similar to VAT are charged and are included in the Simples Nacional combined payment (ICMS, IPI, PIS and COFINS apply to this study)
Does a VAT refund process exist per the case study?NoNo
Restrictions on VAT refund processRefund is not allowed for companies paying taxes under Simples NacionalRefund is not allowed for companies paying taxes under Simples Nacional
Percentage of cases exposed to a VAT audit (%)Not applicableNot applicable
Is there a mandatory carry forward period?NoNo
Time to comply with VAT refund (hours)No VAT refund per case study scenarioNo VAT refund per case study scenario
Time to obtain VAT refund (weeks)No VAT refund per case study scenarioNo VAT refund per case study scenario
Tax correctionsCommercial microenterpriseSmall industrial firm
Does corporate income tax exist?Yes. Corporate income taxes are included in the Simples Nacional combined payment (IRPJ and CSLL)Yes. Corporate income taxes are included in the Simples Nacional combined payment (IRPJ and CSLL)
Percentage of cases exposed to a corporate income tax audit (%)0%-24%0%-24%
Time to comply with a correction of taxes included in Simples Nacional (hours)3.56.0
Time to complete a correction of taxes included in Simples Nacional (weeks)No tax audit per case study scenarioNo tax audit per case study scenario

 

Click on the location names to see details:

Amazonas | Ceará | Federal District | Minas Gerais | Rio Grande do Sul

 

Amazonas

Commercial microenterprise

Tax or mandatory contributionPayments (number per year)Notes on PaymentsTime (hours per year)Statutory tax rateTax baseTotal tax and contribution rate (% of profit)Notes on TTCR

Simples Nacional (combines the following taxes and contributions:

ICMS, PIS, COFINS, IRPJ, CSLL, CPP)

1.0online48.07.3% (minus a deduction of R$5,940)gross revenue46.14 
Employer paid - Severance contribution (FGTS)1.0online 8%gross salaries10.16 
Corporate income tax (IRPJ) over capital gains1.0online 15%capital gains0.71 
Property tax1.0online 0.9%market value of property0.57 
Vehicle tax1.0online 2%market value of vehicle0.56 
Corporate income tax (IRPJ) on interest0.0withheld 20%interest income0.24 
Operating license fee1.0online fee scheduletype of activity0.23 
Employee paid - Social security contributions (INSS)1.0online18.511%gross salaries0.00withheld
Totals7 66.5  58.6 

Small industrial firm

Tax or mandatory contributionPayments (number per year)Notes on PaymentsTime (hours per year)Statutory tax rateTax baseTotal tax and contribution rate (% of profit)Notes on TTCR
Simples Nacional (combines the following taxes and contributions: ICMS, IPI, PIS, COFINS, IRPJ, CSLL, CPP)1.0online343.014.7% (minus a deduction of R$85,500)gross revenue215.00 
Employer paid - Severance contribution (FGTS)1.0online 8%gross salaries9.05 
Corporate income tax (IRPJ) over capital gains1.0online 15%capital gains1.52 
Property tax1.0online 0.9%market value of property1.20 
Corporate income tax (IRPJ) on interest0.0withheld 20%interest income0.51 
Vehicle tax1.0online 2%market value of vehicle0.12 
Operating license fee1.0online fee scheduletype of activity0.06 
Employee paid - Social security contributions (INSS)1.0online193.011%gross salaries0.00withheld
Totals7 536.0  227.5 

 

 

Ceará

Commercial microenterprise

Tax or mandatory contributionPayments (number per year)Notes on PaymentsTime (hours per year)Statutory tax rateTax baseTotal tax and contribution rate (% of profit)Notes on TTCR
Simples Nacional (combines the following taxes and contributions: ICMS, PIS, COFINS, IRPJ, CSLL, CPP)1.0online48.07.3% (minus a deduction of R$5,940)gross revenue46.14 
Employer paid - Severance contribution (FGTS)1.0online 8%gross salaries10.16 
Corporate income tax (IRPJ) over capital gains1.0online 15%capital gains0.71 
Property tax1.0online 1%market value of property0.64 
Operating license fee1.0online fee schedulebuilding size0.57 
Vehicle tax1.0online 1%market value of vehicle0.38 
Corporate income tax (IRPJ) on interest0.0withheld 20%interest income0.24 
Employee paid - Social security contributions (INSS)1.0online18.511%gross salaries0.00withheld
Totals7 18.5  58.8 

Small industrial firm

Tax or mandatory contributionPayments (number per year)Notes on PaymentsTime (hours per year)Statutory tax rateTax baseTotal tax and contribution rate (% of profit)Notes on TTCR
Simples Nacional (combines the following taxes and contributions: ICMS, IPI, PIS, COFINS, IRPJ, CSLL, CPP)1.0online343.014.7% (minus a deduction of R$85,500)gross revenue215.00 
Employer paid - Severance contribution (FGTS)1.0online 8%gross salaries9.05 
Property tax1.0online 2% (minus a deduction of R$2,106)market value of property1.71 
Corporate income tax (IRPJ) over capital gains1.0online 15%capital gains1.52 
Corporate income tax (IRPJ) on interest0.0withheld 20%interest income0.51 
Operating license fee1.0online fee schedulebuilding size0.30 
Vehicle tax1.0online 1%market value of vehicle0.08 
Employee paid - Social security contributions (INSS)1.0online193.011%gross salaries0.00withheld
Totals7 536.0  228.2 

 

 

Federal District

Commercial microenterprise

Tax or mandatory contributionPayments (number per year)Notes on PaymentsTime (hours per year)Statutory tax rateTax baseTotal tax and contribution rate (% of profit)Notes on TTCR
Simples Nacional (combines the following taxes and contributions: ICMS, PIS, COFINS, IRPJ, CSLL, CPP)1.0online48.07.3% (minus a deduction of R$5,940)gross revenue46.14 
Corporate income tax (IRPJ) on interest0.0withheld 20%interest income0.24 
Corporate income tax (IRPJ) over capital gains1.0online 15%capital gains0.71 
Employer paid - Severance contribution (FGTS)1.0online 8%gross salaries10.16 
Employee paid - Social security contributions (INSS)1.0online18.511%gross salaries0.00withheld
Property tax1.0online 1%market value of property0.66 
Vehicle tax1.0online 1%market value of vehicle0.38 
Operating license fee1.0online fee scheduletype of activity0.05 
Public cleaning fee0.0online and jointly fee schedulebuilding location and type of activity0.52 
Totals7 66.5  58.9 

Small industrial firm

Tax or mandatory contributionPayments (number per year)Notes on PaymentsTime (hours per year)Statutory tax rateTax baseTotal tax and contribution rate (% of profit)Notes on TTCR
Simples Nacional (combines the following taxes and contributions: ICMS, IPI, PIS, COFINS, IRPJ, CSLL, CPP)1.0online343.014.7% (minus a deduction of R$85,500)gross revenue215.00 
Corporate income tax (IRPJ) on interest0.0withheld 20%interest income0.51 
Corporate income tax (IRPJ) over capital gains1.0online 15%capital gains1.52 
Employer paid - Severance contribution (FGTS)1.0online 8%gross salaries9.05 
Employee paid - Social security contributions (INSS)1.0online193.011%gross salaries0.00withheld
Property tax1.0online 1%market value of property1.41 
Vehicle tax1.0online 1%market value of vehicle0.08 
Operating license fee1.0online fee scheduletype of activity0.03 
Public cleaning fee0.0online and jointly fee schedulebuilding location and type of activity0.30 
Totals7 536.0  227.9 

 

 

Minas Gerais

Commercial microenterprise

Tax or mandatory contributionPayments (number per year)Notes on PaymentsTime (hours per year)Statutory tax rateTax baseTotal tax and contribution rate (% of profit)Notes on TTCR
Simples Nacional (combines the following taxes and contributions: ICMS, PIS, COFINS, IRPJ, CSLL, CPP)1.0online48.07.3% (minus a deduction of R$5,940)gross revenue46.14 
Corporate income tax (IRPJ) on interest0.0withheld 20%interest income0.24 
Corporate income tax (IRPJ) over capital gains1.0online 15%capital gains0.71 
Employer paid - Severance contribution (FGTS)1.0online 8%gross salaries10.16 
Employee paid - Social security contributions (INSS)1.0online18.511%gross salaries0.00withheld
Property tax1.0online 1.2%market value of property0.65 
Vehicle tax1.0online 1%market value of vehicle0.37 
Operating license fee1.0online fee schedulebuilding area0.29 
Garbage collection fee0.0online and jointly fee schedulecollection frequency1.47 
Totals7 66.5  60.0 

Small industrial firm

Tax or mandatory contributionPayments (number per year)Notes on PaymentsTime (hours per year)Statutory tax rateTax baseTotal tax and contribution rate (% of profit)Notes on TTCR
Simples Nacional (combines the following taxes and contributions: ICMS, IPI, PIS, COFINS, IRPJ, CSLL, CPP)1.0online343.014.7% (minus a deduction of R$85,500)gross revenue215.00 
Corporate income tax (IRPJ) on interest0.0withheld 20%interest income0.51 
Corporate income tax (IRPJ) over capital gains1.0online 15%capital gains1.52 
Employer paid - Severance contribution (FGTS)1.0online 8%gross salaries9.05 
Employee paid - Social security contributions (INSS)1.0online193.011%gross salaries0.00withheld
Property tax1.0online 1.4%market value of property1.91 
Vehicle tax1.0online 1%market value of vehicle0.08 
Operating license fee1.0online fee schedulebuilding area0.12 
Garbage collection fee0.0online and jointly fee schedulecollection frequency0.31 
Totals7 536.0  228.5 

 

 

Rio Grande do Sul

Commercial microenterprise

Tax or mandatory contributionPayments (number per year)Notes on PaymentsTime (hours per year)Statutory tax rateTax baseTotal tax and contribution rate (% of profit)Notes on TTCR
Simples Nacional (combines the following taxes and contributions: ICMS, PIS, COFINS, IRPJ, CSLL, CPP)1.0online48.07.3% (minus a deduction of R$5,940)gross revenue46.14 
Corporate income tax (IRPJ) on interest0.0withheld 20%interest income0.24 
Corporate income tax (IRPJ) over capital gains1.0online 15%capital gains0.71 
Employer paid - Severance contribution (FGTS)1.0online 8%gross salaries10.16 
Employee paid - Social security contributions (INSS)1.0online18.511%gross salaries0.00withheld
Property tax1.0online 1.1%market value of property0.69 
Vehicle tax1.0online 1%market value of vehicle0.38 
Operating license fee1.0online fee scheduletype of activity0.08 
Garbage collection fee0.0online and jointly fee schedulebuilding size0.66 
Totals7 66.5  59.1 

Small industrial firm

Tax or mandatory contributionPayments (number per year)Notes on PaymentsTime (hours per year)Statutory tax rateTax baseTotal tax and contribution rate (% of profit)Notes on TTCR
Simples Nacional (combines the following taxes and contributions: ICMS, IPI, PIS, COFINS, IRPJ, CSLL, CPP)1.0online343.014.7% (minus a deduction of R$85,500)gross revenue215.00 
Corporate income tax (IRPJ) on interest0.0withheld 20%interest income0.51 
Corporate income tax (IRPJ) over capital gains1.0online 15%capital gains1.52 
Employer paid - Severance contribution (FGTS)1.0online 8%gross salaries9.05 
Employee paid - Social security contributions (INSS)1.0online193.011%gross salaries0.00withheld
Property tax1.0online 1.1%market value of property1.47 
Vehicle tax1.0online 1%market value of vehicle0.08 
Operating license fee1.0online fee scheduletype of activity0.02 
Garbage collection fee0.0online and jointly fee schedulebuilding size0.25 
Totals7 536.0  227.9