Business Taxes in Brazil: Simples, Presumido and Real
Companies in Brazil choose one of three tax regimes: Simples Nacional (to R$ 4.8M), Lucro Presumido (to R$ 78M) or Lucro Real. How each one taxes you.
Business taxes in Brazil come in three regimes — Simples Nacional, Lucro Presumido and Lucro Real — and the one a company sits in decides how much tax it pays and how. The Simples Nacional folds several taxes into a single monthly slip for companies up to R$ 4.8 million a year. The Lucro Presumido taxes a margin the tax authority assumes for the activity, up to R$ 78 million. The Lucro Real taxes the profit a company actually records, with no ceiling and mandatory above R$ 78 million. Locked for the whole calendar year, the choice is usually made with an accountant after simulating each one.
Business taxes in Brazil: the three regimes
What separates the regimes is the tax base — revenue, a presumed margin, or real profit — and whether the taxes are paid together or one by one:
| Regime | Revenue limit | Tax base | Payment | Best suited to |
|---|---|---|---|---|
| Simples Nacional | Up to R$ 4.8 million | A rate on revenue, by activity annex (from 4%) | Single DAS slip | Micro and small companies |
| Lucro Presumido | Up to R$ 78 million | IRPJ and CSLL on a presumed margin | Separate taxes | High-margin businesses and many services |
| Lucro Real | No limit (mandatory above R$ 78 million) | IRPJ and CSLL on real profit | Separate taxes | Large, low-margin or regulated companies |
Simples Nacional: everything in one slip
The Simples Nacional is the entry-level regime, open to a microempresa or an empresa de pequeno porte earning up to R$ 4.8 million a year. Instead of paying each tax on its own, the company settles them together in one monthly document, the DAS, and the rate is read off one of five activity annexes — starting at 4% for commerce, 4.5% for industry and 6% for most services. For service companies, the Fator R can move the business to the cheaper Annex III when payroll reaches 28% of revenue. It is normally the lightest and least bureaucratic option for small businesses, which is why most of them start here.
Lucro Presumido: tax on an assumed margin
In the Lucro Presumido, the IRPJ and the CSLL are not charged on the profit a company really makes, but on a margin the Receita Federal assumes for its activity — from as low as 1.6% up to 32% of revenue, with commerce presumed at 8% and most services at 32%. On that presumed base the company pays IRPJ of 15%, plus a 10% surcharge on the profit above R$ 20,000 a month, and CSLL of 9%; PIS and COFINS are then charged cumulatively at 3.65% of revenue, with no input credits, and the municipal ISS at 2% to 5%.
Because the tax ignores real costs, the regime rewards efficiency: it tends to pay off when a company’s actual margin — revenue minus expenses — is at or above the presumed one, roughly 32% for services. It is capped at R$ 78 million a year and also demands less accounting control than the Lucro Real, which is part of its appeal for lean, high-margin service businesses.
Lucro Real: tax on actual profit
The Lucro Real is the opposite logic: the IRPJ (15% plus the 10% surcharge) and the CSLL (9%) fall on the profit the accounting actually records, after the additions and exclusions the law requires. A company with thin margins, heavy costs or a loss in the period therefore pays less — or nothing — on income, which is exactly when this regime wins. Here PIS and COFINS are non-cumulative at 9.25%, but the company can offset credits on inputs, so cost-heavy operations recover part of it.
It carries no revenue ceiling, is mandatory above R$ 78 million a year and for some regulated activities such as banks and insurers, and comes with the fullest bookkeeping obligations of the three.
How to choose
The regimes are not ranked from best to worst — the right one depends on revenue, activity, margin and how much cost the business carries. A rough guide: the Simples Nacional fits most small companies; the Lucro Presumido rewards high margins and low costs; the Lucro Real protects low-margin or loss-making operations and is unavoidable for the largest. Since the decision is paid for in tax across the whole year and cannot be changed mid-year, it is normally made with an accountant, traditional or an online accounting service, that runs the numbers for each regime before the company opts in.
Frequently asked questions
What are the business taxes in Brazil? Companies are taxed under one of three regimes — Simples Nacional, Lucro Presumido or Lucro Real — which set the tax base and the main taxes: IRPJ, CSLL, PIS, COFINS and, by activity, ICMS or ISS.
What is the difference between Lucro Presumido and Lucro Real? The Lucro Presumido taxes a margin the tax authority assumes (about 8% to 32% of revenue); the Lucro Real taxes the profit actually recorded. High-margin companies usually pay less under the Presumido, low-margin ones under the Real.
Which regime is mandatory for large companies? The Lucro Real is mandatory for companies earning above R$ 78 million a year, and for some regulated activities regardless of revenue.
Who chooses the tax regime, and when? The company does, normally on the advice of an accountant or an online accounting service, and the choice applies for the whole calendar year, so it is set when the company opens or at the start of the year.