Can your company be entitled to the so-called tax credit? This is a benefit aimed at small and medium businesses, providing for the reduction in the amount due in the payment of certain taxes. Knowing the rules is the first step to making use of this advantage.

Taxes entitled to tax credit

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It is no secret that the high tax burden represents one of the biggest challenges for the Brazilian entrepreneur. In this scenario, the granting of benefits ends up helping the company to maintain a lot. And that’s where the tax credit comes in.

The benefit is granted to small and medium-sized enterprises as an incentive, whereby businesses may deduct part of their invoicing or exit taxes. Let us detail now, with particular attention to the specific operations for granting the benefit in each tax.

But how can this advantage be enjoyed and what taxes are entitled to tax credit? 

The ICMS is a state tax and, for this reason, has different rates throughout the country (ranging from 7% to 18%) and also in interstate transportation operations. There are still exemptions forecast and the tip is to consult the state government website to get more information. Commercial, industrial or industry-related companies may use the tax to obtain tax credit, provided they use the presumption of profits. Some of the operations include the use of freight from carriers and the consumption of electricity in case of products for export and the return of articles for which tax has already been charged at exit.

Transport companies, in turn, have the extra options for the tax credit the purchase of any materials that are suitable for the operation itself, such as fuels and additives, which are considered inputs.

Similarly, industrial companies are entitled to this type of credit when they purchase raw materials or some intermediate product. The Tax on Industrialized Products (PPI) is due by those who produce or import, having as a generator fact the output of the industrial establishment or its customs clearance when coming from abroad. It is calculated on the sales price and the rates are in the TPPI table.

As the tax is levied on industrialized products, only industries or companies that are equivalent to them are entitled to tax credit.

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The benefit is also restricted to those who collect taxes based on Presumed Profit. The planned operations include the purchase of raw materials, production goods and the return of products.

You can also get credit for this tax even by buying from wholesale merchants who do not issue the PPI on the notes. In such cases, the company is responsible for making the calculation basis in order to obtain the tax credit.

PIS and Cofins

The Social Integration Program (PIS) and the Contribution to Social Security Financing (Cofins) are federal taxes. The first is calculated monthly on the amount of invoicing or payroll. The second is calculated on gross revenue and is intended for social security and welfare funds.

The tax credit related to these two taxes can be obtained when the company uses Real Profit as a basis for taxation, regardless of its economic activity. For these two taxes, you can use the tax paid for transportation as well as goods issue. Other possibilities include storage costs and even electricity and rent, as long as the property is not part of the company’s assets. In addition, to be eligible for tax credit in this context, products must be purchased from Brazilian companies.

Companies in Simple are entitled to tax credit?

Tax scheme considered to be most advantageous for micro and small companies, National Simple cannot be used for those seeking tax credit. Even if the categories foreseen to qualify for the incentive are classified, it cannot be applied under any circumstances, due to the lower billing.

Given the impediment, the manager interested in the right to tax credit should advise whether it is more advantageous to exchange Simple for another tax scheme and thus achieving a reduction in taxes, or if it is best to remain within it, taking advantage of their other taxes. benefits.

The suggestion is that you talk in detail with your accountant, who is the one who best understands tax and tax management.

And can best advise you on the pros and cons of each possible path.

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If you want to leave Simple National, it is important to evaluate which option is most interesting between Real Profit and Presumed Profit. Again, the accounting office is your biggest partner for this decision. Let’s briefly summarize each one:

  • Real Profit: scheme in which taxation is calculated on the net income of the calculation period, considering amounts to be added or discounted according to the compensations allowed by law.
  • Assumed Profit: Simplified tax formula to determine the basis of calculation of Corporate Income Tax (IRPJ) and Social Contribution on Net Income (CSLL). Can be chosen by non-US companies to adopt Real Profit for the calendar year in question.

Do the math to benefit

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If it is true that Brazil has one of the highest tax burdens in the world, we cannot deny the importance of taking advantage of all legal ways to pay less taxes. And it is crucial to reinforce the legal aspect, as no deviation from the law is worth it, such as evasion. As we saw in this article, the tax credit is provided for in the law, has well-defined rules and thus can be an interesting tool to reduce the weight of taxes on your budget.

But as this definition even involves choosing the tax scheme to adopt – there is no way to make such an important decision without having all the information. Thus, the final tip imposes to strengthen the accountant’s role as his business partner. With his experience and knowledge, this professional offers conditions to point the safest and most profitable way.

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