Business · Economy · 1 hr ago
Brazil’s presumed-profit tax regime may lose ground from 2027
Brazil’s presumed-profit tax regime may lose ground as recent legal changes reduce its advantages for businesses.
The regime calculates taxes on business profits using a legally set estimate based on revenue, rather than checking actual costs and expenses.
It was introduced in 1995 and is used by about 85% of companies outside Simples Nacional, according to the latest figures cited.
Its simplicity has helped businesses and tax authorities, but greater digital oversight and lower informality have reduced the need for this approach.
New rules raise estimated profit margins on annual revenue above R$5 million, while a minimum tax on high earners may add tax on some distributed profits; the consumption tax reform also removes a key reason to choose it from 2027.
Together, these changes could lead businesses to move from presumed profit to real profit in 2027, though the simpler regime is expected to remain useful to some.
Brazil’s presumed-profit tax regime may lose users to the actual-profit regime from 2027, according to a report by Estadão.
The regime applies a legally set profit margin to a company’s gross revenue, based on its economic activity.
About 85% of companies outside the Simples Nacional system use the presumed-profit regime, according to the latest data cited.
Recent tax changes and the planned end of PIS/Cofins are among the factors that could make the regime less attractive.
The article says the regime will remain a simplified way to calculate taxes on profit, but its earlier justifications have weakened.
- Who
- Brazilian companies using the presumed-profit tax regime may move to the actual-profit regime.
- What
- The presumed-profit regime may lose ground as tax changes reduce its advantages.
- When
- A shift may begin in 2027.
- Where
- Brazil.
- Why
- Recent legislative changes, the end of PIS/Cofins from 2027 and other economic factors may reduce the regime’s appeal.
This story does not have two clearly opposing sides.
Brazil created the presumed-profit tax regime.
The revenue limit for choosing the regime was last updated, and has remained at R$78 million, according to the article.
The government raised presumed profit margins by 10% on the portion of annual revenue above R$5 million, according to the article.
A minimum tax for high-income individuals took effect and may add a 10% tax on profits and dividends distributed by Brazilian companies using the regime.
The consumption tax reform is set to end PIS/Cofins, and companies may start moving from the presumed-profit regime to the actual-profit regime.
- Share of profit-tax revenue
- About 20%–30% comes from companies using the presumed-profit regime.
- Use outside Simples Nacional
- About 85% of companies use the presumed-profit regime.
- Revenue threshold for higher margins
- R$5 million in annual revenue.
- Choice-of-regime revenue limit
- R$78 million, unchanged since 2013.
- Possible migration
- From the presumed-profit regime to the actual-profit regime in 2027.