How much tax does a legal entity pay in Brazil? Complete guide for companies and self-employed professionals

[jisansorkar8990]

We all know that everyone pays taxes in Brazil, whether they are individuals or legal entities. But do you know how much tax a legal entity pays ? If you don't know, you need to know so you can pay less taxes and avoid unnecessary expenses, while always staying in good standing with the official bodies.

The Brazilian tax burden is quite heavy, so we created a guide for companies and self-employed professionals to use and reduce the amount they pay in taxes.

sesame hr logo
Attract, assess and select the best candidates with Sesame RH's recruitment tool

Streamline and improve the entire recruitment process. Simplify the hiring process and build an exceptional team that drives growth for your organization.


Free trial
Understanding Taxation for Legal Entities (PJ) in Brazil
In short, we can say that most PJs pay around 9% to 11% in taxes in total.

Let's look at the tax brackets for PJ professionals:

Up to R$15,000 per month: 6.0%
Up to R$30,000 per month: 11.20%
Up to R$60,000 per month: 13.50%
What taxes does a legal entity need to pay?
Paying some taxes depends on the taxation model your company fits into.

In this sense, it is very important that you have the help of an accountant to better understand what the business taxes are for each of the regimes.

Below, we have listed the taxes that a legal entity needs to pay to stay up to date with the government. Let's look at each of them separately.

Social Security (INSS)
Contribution paid to the government that goes to the Social bahamas whatsapp list Security fund, responsible for paying pensions and employment benefits.

Tax on Services of Any Nature (ISS)
Charged on the provision of any type of service. The rate of this tax varies according to the legislation of the municipality, tax classification and size of the company.

The charge is 2% to 5% and the tax may or may not be withheld by the service provider.

Contribution to Social Security Financing (COFINS)
All companies that opt ​​for presumed profit and real profit must pay this contribution. The amount is intended to finance social programs.

The rate corresponds to between 3% and 7.6% of the gross profit value of each organization.

BR - Blog CTA - How to choose HR software
Social Integration Program (PIS/PASEP)
This is already paid as a form of contribution that goes directly to the fund responsible for salary bonuses and unemployment insurance . It is generally paid by companies that have employees.

Tax on the Circulation of Goods and Services (ICMS)
Charged for the circulation of goods and services between cities, states and on imports. The amount collected monthly varies according to the location and your company's CNAE. The percentages range from 7% to 21%.

Social Contribution on Net Profit
Collected by the federal government, its purpose is to finance social security. It is taxed on the company's net profit. In fact, it is only charged to those who qualify for real or presumed taxation. The rates are 9% for legal entities and 15% for financial institutions.

CPP – Employer Social Security Contribution
It consists of a federal tax to pay Social Security. It is based on the value of the total remuneration paid to employees during the month.

Tax on Industrialized Products
Tax paid by different categories that do business with industrialized products, for example, importers, auctioneers and traders.

Corporate Income Tax (IRPJ)
It is levied on profits obtained by legal entities. This will certainly depend on the company's tax regime; IRPJ may be levied on revenue or on a presumption of profit.

Companies classified as Real Profit will have their IRPJ calculated on their profit, resulting in higher rates.

On the other hand, companies classified under the Presumed Profit do not need to determine profit to calculate IRPJ, as the RFB (Brazilian Federal Revenue Service) has already determined a presumption of profit.

In this way, service providers have a presumption that 32% of their revenue is profit. Therefore, IRPJ is calculated on this 32%. If it is a commercial company, the presumption of profit is 8%.

Finally, companies registered under Simples Nacional have their IRPJ calculated based on their revenue.