Do you know how taxation works for service providers and what you can do to pay less tax? If you have any questions on the subject, you've come to the right place.
In this article CLM Controller will detail taxation for service providers who work as individuals and as legal entities. It's worth a look!
Taxation for individual service providers
According to current legislation, taxation for service providers who act as individuals, i.e. who do not have a CNPJ, is based on the Income taxThe tax rate can be as high as 27.50%.
See the table below:
| Calculation basis | Rate | Portion to be deducted |
|---|---|---|
| Up to 2,259.20 | Exempt | Exempt |
| From 2,259.21 to 2,826.65 | 7.50% | R$ 169.44 |
| From 2,826.66 to 3,751.05 | 15% | R$ 381.44 |
| From 3,751.06 to 4,664.68 | 22.50% | R$ 662.66 |
| Above 4,664.68 | 27.50% | R$ 896,00 |
In addition, the professional has to contribute monthly to the INSS and pay up to 5% of ISS on the services provided. Without a doubt, this is not an economical option.
Taxation for service providers in Simples Nacional
O Simples Nacional is a tax regime that can be used by service providers who have a CNPJ and earn up to R$ 4.8 million a year.
Under this system, the contribution rate will take into account the annual turnover of the company providing services and the type of activity it carries out.
There are three possible annexes with rates for calculating taxes in the area of services. Check with our accountants to see which of the options your type of activity is taxed on.
Annex III
| Track | Revenue in 12 months | Rate | Amount to be deducted |
|---|---|---|---|
| 1ª | Up to 180,000.00 | 6.00% | -- |
| 2ª | From 180,000.01 to 360,000.00 | 11,20% | R$ 9,360.00 |
| 3ª | From 360,000.01 to 720,000.00 | 13,20% | R$ 17,640.00 |
| 4ª | From 720,000.01 to 1,800,000.00 | 16.00% | R$ 35.640,00 |
| 5ª | From 1,800,000.01 to 3,600,000.00 | 21.00% | R$ 125.640,00 |
| 6ª | From 3,600,000.01 to 4,800,000.00 | 33.00% | R$ 648.000,00 |
Annex IV
| Track | Revenue in 12 months | Rate | Amount to be deducted |
|---|---|---|---|
| 1ª | Up to 180,000.00 | 4.50% | - |
| 2ª | From 180,000.01 to 360,000.00 | 9.00% | R$ 8,100.00 |
| 3ª | From 360,000.01 to 720,000.00 | 10,20% | R$ 12,420.00 |
| 4ª | From 720,000.01 to 1,800,000.00 | 14.00% | R$ 39.780,00 |
| 5ª | From 1,800,000.01 to 3,600,000.00 | 22.00% | R$ 183.780,00 |
| 6ª | From 3,600,000.01 to 4,800,000.00 | 33.00% | R$ 828.000,00 |
Annex V
| Track | Revenue in 12 months | Rate | Amount to be deducted |
|---|---|---|---|
| 1ª | Up to 180,000.00 | 15.50% | -- |
| 2ª | From 180,000.01 to 360,000.00 | 18.00% | R$ 4.500,00 |
| 3ª | From 360,000.01 to 720,000.00 | 19.50% | R$ 9.900,00 |
| 4ª | From 720,000.01 to 1,800,000.00 | 20.50% | R$ 17.100,00 |
| 5ª | From 1,800,000.01 to 3,600,000.00 | 23.00% | R$ 62.100,00 |
| 6ª | From 3,600,000.01 to 4,800,000.00 | 30.50% | R$ 540.000,00 |
Important: Considering the values in the "Amount to be deducted"The maximum effective Simples Nacional tax rate for dentists is 19.50% on turnover.
Having presented the tables above, it is very important to clarify that Simples Nacional is not always the most economical option for service providers.
Taxation for service providers under Presumed Profit
O Presumed Profit is a tax regime that can be used by service providers who have a CNPJ and earn up to R$ 78 million a year.
In addition, while in Simples Nacional taxes are paid in a single monthly payment, with rates that vary according to turnover.
In Presumed Profit, each tax is paid in its own form and the rates are fixed, i.e. they do not vary with the growth in turnover.
The basic list of Presumed Profit rates is as follows:
- IRPJ: 15%
- CSLL: 9%
- PIS: 0.65%
- COFINS: 3%
- ISS: 2% to 5%
At first, the IRPJ and CSLL rates may catch your eye, but they are not calculated on company turnover but on a percentage of it, i.e. the famous Presumed Profit.
Below we present two tables with the presumption rates, one for IRPJ and the other for CSLL.
IRPJ - Corporate Income Tax
| Activities | Rate |
|---|---|
| Freight Transportation Service Real Estate Services Hospital Services Rural Services. | 8 % |
| Transportation services (except freight) General Services (with gross revenue up to R$ 120,000/year) | 16% |
| Professional Services Business Intermediation Services Property Management and Leasing Services - Services in general, for which no specific percentage has been set | 32% |
CSLL - Social Contribution on Net Profit;
| Activities | Rate |
|---|---|
| Hospital Services Transportation Services | 12% |
| Services in general, except hospital and transportation services | 32% |
Therefore, the highest effective rates of IRPJ and CSLL in Presumed Profit for service providers are respectively:
- IRPJ: 4.80%
- CSLL: 2.88%
That said, we can say that the final Presumed Profit rate for service providers can vary from 13.33% to 16.33% on turnover, distributed as follows:
- IRPJ: 4.80%
- CSLL: 2.88%
- PIS: 0.65%
- COFINS: 3%
- ISS: 2% to 5% (depending on municipal legislation).
There's no doubt about it, when it comes to taxation for service providers, the best way to save on paying taxes is to opt for the opening a CNPJ with the guidance of a specialized accounting firm.
Frequently Asked Questions
1. What is the best tax regime for service providers?
It depends on the activity and turnover. Simples Nacional is advantageous for companies with lower revenues and activities with reduced tax rates. Presumed Profit can be more economical for those with low profit margins and lean costs. Real Profit is ideal when there are tax losses or a high volume of deductible expenses.
2. How can a service provider legally pay less tax?
Through tax planningThis includes: choosing the right regime, reviewing CNAEs, taking advantage of credits, separating income by activity, and strategic tax frameworks. A complete diagnosis helps to find these opportunities.
3. Is it worth changing tax regimes over time?
Yes, as long as it's planned. Changes in the company's size, cost structure or legal changes may justify changing the regime. The decision should be based on comparative simulations carried out by a specialized accountant.
4. What common mistakes cause service providers to pay more tax than they should?
-
Wrong choice of tax regime
-
Outdated or inappropriate CNAE
-
Lack of control over costs and deductible expenses
-
Do not separate revenue by type of service
-
Lack of updating with changes in legislation
5. How does CLM Controller help service providers save money?
CLM carries out a complete diagnosis of the company's operations and tax structure, assessing the best regime, reviewing accounting procedures and proposing strategic adjustments. The aim is to reducing the tax burden with legal certainty and improving financial management.
If you are a self-employed service provider or own a service provider company and would like to save money on paying taxes, click on the WhatsApp button and contact us!
We serve companies in all parts of the country, always looking for the best tax-saving solutions.
Check out some of our services:
- Guidance and advice on starting a business;
- Calculating taxes and issuing tax slips;
- Pro-labore and payroll calculation;
- Bookkeeping of tax and accounting movements;
- Preparation of the balance sheet and income statement;
- Registering and hiring employees;
- Among other important items.
You can count on our support to help your company go further, avoid problems with the tax authorities, be more profitable and make significant monthly tax savings.
Our team of experts is waiting to hear from you!
Spreadsheet
Simples taxes
Spreadsheet
Presumed Profit
Upgrade your finances:
Talk to us!
Salário-maternidade e direitos da gestante: guia completo para empresários
Neste artigo você irá entender de forma clara e objetiva os fundamentos do salário‑maternidade — [...]
Jul
Simples nacional in the tax reform: what changes?
Simples Nacional in the Tax Reform: what changes? In this article, prepared by the CLM team [...]
Jul
FGTS after the deadline: What are the consequences and how to avoid losses?
Avoid fines and legal risks! Find out how to settle FGTS arrears with practical tips and [...]
Jun
LCI and LCA: what they are and what the new taxation changes
Find out how LCI and LCA work - two fixed income options that [...]
Jun
Real Profit or Presumed Profit: which regime is best for telecommunications companies?
Find out in this article what the differences and similarities are between these two tax regimes? Find out [...]
Jun
Accounting Outsourcing: understand what it is and its advantages
Accounting outsourcing is a strategic solution that consists of fully outsourcing accounting activities [...]
Jun
IOF and Real Profit companies: understand the impacts
In this article, we clearly explain each type of IOF, their current rates and how [...]
Jun
