Is presumed profit cumulative or non-cumulative?

When it comes to federal taxation, many people wonder whether presumed profit is cumulative or non-cumulative in relation to PIS and Cofins. The doubt is common because these terms appear in guides, ancillary obligations and tax planning, but almost never in a clear way.
In short, in presumed profit, PIS and Cofins usually follow the cumulative system, with no right to credits. In the case of real profit, PIS and Cofins generally follow the non-cumulative system, with the possibility of appropriating credits.
To understand in detail how this works in practice, when there are exceptions and how it impacts your company's cash flow, read on and see the full analysis.

Presumed profit: what it is and who qualifies

Presumed profit is an IRPJ and CSLL tax regime in which the IRS assumes profit based on a percentage applied to the company's gross revenue and other income.
Instead of calculating the real accounting profit, the law defines different presumed margins by activity, such as services, commerce or industry.
As a rule, companies with annual gross revenue of up to R$ 78 million (or a proportional limit at the start of activity), which are not obliged to make a real profit for a specific activity, such as financial institutions, can opt for presumed profit.
This regime tends to attract businesses with reasonable margins and a lean structure, because it simplifies the calculation of IRPJ and CSLL.
However, the choice also needs to take into account the impact on PIS and Cofins, since presumed profits are, in most cases, subject to the cumulative regime for these contributions.

How the cumulative PIS-Pasep and Cofins system works

The regime cumulative of PIS-Pasep and Cofins is the one in which the company calculates the contributions directly on the gross revenue, without the right to credits on inputs, purchases or expenses. 

The rates are lower than in the non-cumulative system, but the tax is levied “cascading” along the chain.

When discussing whether presumed profit is cumulative or non-cumulative, This model is generally referred to as the "cumulative regime": presumed profit companies, with the exceptions provided for by law, submit PIS and Cofins to the cumulative regime. 

The main legal basis lies in rules such as the Law No. 9.718/1998 and subsequent legislation dealing with the system of these contributions.

How the non-cumulative PIS-Pasep and Cofins regime works

The non-cumulative PIS-Pasep and Cofins allow companies to deduct credits linked to costs, expenses and charges defined by law, such as the purchase of inputs, energy, rents and some services. 

The tax rates are higher than in the cumulative system, but in return the taxpayer can deduct these credits from the amount payable, reducing the effective tax burden.

This regime applies, as a rule, to companies subject to the real profit, according to legislation such as Law 10.637/2002 (PIS) and Law No. 10.833/2003 (Cofins). The rationale is to bring taxation closer to a value-added model, avoiding cascading taxes throughout the stages of the production chain.

In short, is presumed profit cumulative or non-cumulative?

To put it bluntly: in the presumed profit regime, PIS and Cofins, as a rule, follow the cumulative regime. That's why the question “presumed profit is cumulative or non-cumulative” usually points to the answer: cumulative, without the right to credits as in the case of real profit.

In practice, the company calculates PIS and Cofins on revenue, with lower tax rates, but without offsetting inputs and expenses authorized under the non-cumulative regime. 

Even so, it is necessary to check that the activity or a specific type of income does not suffer from exceptions provided for by law. This is precisely why tax planning must take into account the entire set: IRPJ, CSLL, PIS, Cofins and sector peculiarities.

Of course, let's focus now on what matters to us. presumed profit: the regime cumulative PIS and Cofins.

Table - Cumulative regime (PIS and Cofins in presumed profit)

What is the non-cumulative real profit rate?

The table below summarizes, in the context of real profit with non-cumulative regime, The main federal contributions on invoicing (PIS and Cofins), as well as IRPJ and CSLL as a reference for tax rates:

Note: Values represent the general system; specific sectors may have their own rules or special regimes.

Is presumed profit cumulative or non-cumulative in practice?

Doubt “presumed profit is cumulative or non-cumulative” sounds like a technical question, but in practice it defines how much your company pays in PIS, Cofins, IRPJ and CSLL. 

A wrong choice of regime or a superficial interpretation of the rule can mean years of overpayment of tax, erosion of margins and loss of competitiveness against better advised competitors.

A CLM Controller doesn't just fill out forms or meet deadlines. It acts as a true strategic accounting boutique, focusing on Presumed Profit companies, accustomed to dealing with corporate structures complex, national operations and international and scenarios in which every percentage point of tax makes a difference. 

The team combines more than 40 years' experience with high technical standards, intensive use of technology, management reports and tax simulations which compare the impact of each regime in practice.

Instead of addressing the question “presumed profit is cumulative or non-cumulative” as a detail, the CLM sees this issue as part of a planning greater: a legal reduction in the tax burden, cash protection and support for business growth.

Talk to an expert from CLM Controller and request a strategic tax diagnosis. Decisions on tax regimes shouldn't be based on guesswork, but on an in-depth analysis of your company's figures.