Service Company Tax in Brazil: How Much You Pay
A service company's tax in Brazil starts at 6% in the Simples Nacional (Anexo III) and depends on the regime and the Fator R. See the rates by regime.
Service company tax in Brazil depends on the tax regime, and for most small service companies it starts at 6% of revenue under the Simples Nacional (Anexo III). The same company can instead fall under Anexo V, where the rate starts at 15.5%, and the split between the two is decided by the Fator R — the ratio of payroll to revenue. Outside the Simples, a service company is taxed under the Lucro Presumido or the Lucro Real, with a different and usually higher effective burden. The regime, not the activity alone, is what sets the bill.
What decides service company tax
Three things set the tax: the tax regime, the activity’s CNAE, and — inside the Simples — the Fator R. A service company earning up to R$ 4.8 million a year can opt for the Simples Nacional; the CNAE and the Fator R then decide which annex applies. This is why the same revenue can carry very different tax, and why the regime is defined with an accountant before the CNPJ is issued, in the MAT.
In the Simples Nacional
Services sit in Anexo III or Anexo V:
- Anexo III starts at 6% and covers most common services.
- Anexo V starts at 15.5% and covers more knowledge-based activities.
- The Fator R decides between them: when payroll (including pro-labore) is at least 28% of revenue, the company is taxed under the lower Anexo III instead of Anexo V.
Because a few percentage points of payroll can move a company from 15.5% to 6%, monitoring the Fator R month by month is one of the clearest ways an accountant reduces the tax legally.
In the Lucro Presumido and Lucro Real
Above the Simples ceiling, or when it is not advantageous, a service company uses:
| Regime | Who it is for | How the tax is built |
|---|---|---|
| Simples Nacional | Revenue up to R$ 4.8 million | One unified DAS; services start at 6% (Anexo III) or 15.5% (Anexo V) |
| Lucro Presumido | Revenue up to R$ 78 million | Profit presumed at 32% for services; IRPJ 15% (plus 10% on the presumed profit above R$ 20,000 a month), CSLL 9%, PIS/COFINS 3.65%, plus ISS of 2% to 5% |
| Lucro Real | Mandatory above R$ 78 million | IRPJ and CSLL on actual profit, plus PIS/COFINS and ISS |
As of 2026 a recent change, Lei Complementar 224/2025, raises the presumption percentages by 10% on annual revenue above R$ 5 million in the presumed regimes, though the measure is being challenged in court — a point to confirm case by case.
How a service company pays the least legally
The lowest legal tax comes from matching the regime, the CNAE and the payroll structure, then keeping them under review — most often the Simples with the Fator R kept above 28%. An accountant or an online accounting service defines this at the opening and monitors it afterwards; the full picture of the three regimes is set out in the guide to business taxes in Brazil, and the regime itself is chosen in the MAT, as explained in the same guide to business taxes.
Frequently asked questions
How much tax does a service company pay in Brazil? In the Simples Nacional it starts at 6% of revenue (Anexo III) or 15.5% (Anexo V), decided by the Fator R; other regimes are usually higher.
What is the Fator R? The ratio of payroll, including pro-labore, to revenue. When it is at least 28%, a service company is taxed under Anexo III (from 6%) instead of Anexo V (from 15.5%).
When does a service company leave the Simples Nacional? When annual revenue passes R$ 4.8 million, it moves to the Lucro Presumido, and above R$ 78 million the Lucro Real becomes mandatory.
How are services taxed in the Lucro Presumido? Profit is presumed at 32%, with IRPJ of 15% (plus 10% above R$ 20,000 of monthly presumed profit), CSLL of 9%, PIS/COFINS of 3.65% and municipal ISS of 2% to 5%.
Who defines the regime? An accountant or an online accounting service, in the MAT, before the CNPJ is issued.