Tax compliance is essential for the sustainable growth of industries in Brazil, in a complex and constantly evolving regulatory landscape. Accounting management needs to be precise and rigorous to avoid errors that can result in severe assessments and penalties from the tax authorities.
Compulsory bookkeeping
All companies, except the Individual Microentrepreneur (MEI)All companies are obliged to keep regular accounting records. This includes the correct issuance of tax documents and the accurate recording of revenue. Failure to keep these records can unduly reduce the basis for calculating the taxes due, leading to lower payments than legally required.
Transparency in financial transactions
Technological advances such as the "Hal" supercomputer from the Central Bank allow tax authorities to cross-check bank and credit/debit card transaction data with the income declared by companies. This ensures that financial resources have a proven origin, avoiding inconsistencies that could result in fines.
Accurate inventory recording
Keeping an accurate inventory is crucial to avoiding problems with the tax authorities. Tools such as the ICMS/IPI Digital Tax Bookkeeping (EFD) and electronic invoices allow the tax authorities to carry out a complete survey of the goods handled by the company. Omissions of incoming or outgoing goods can result in significant penalties.
Find out: ICMS: What it is and how to calculate it
Correct calculation of taxes
Correctly calculating taxes according to the company's tax regime (Real Profit, Presumed Profit or Simples Nacional) is essential to avoid undue or insufficient payments. Errors in applying tax rates, calculating incorrect bases and using outdated legislation can result in high fines and interest.
Accessory declarations and SPED
The accessory declarations required by the Public Digital Bookkeeping System (SPED) are crucial for electronic inspection. Any error in these declarations can attract the attention of the tax authorities, resulting in assessments and sanctions. It is essential that all accounting and tax information is consistent and accurate to avoid problems.
Understanding the role of the tax authorities
The term "tax authorities" refers to the tax authorities that control and supervise the payment of taxes at federal, state and municipal level. The main objective is to ensure that companies comply correctly with their tax obligations, promoting tax justice and the necessary revenue for the state.
Tax spheres in Brazil
In Brazil, the tax authorities operate on three levels:
- Federal: Responsible for taxes such as Income Tax (IR), Contribution to PIS/PASEP, COFINS, among others.
- State: In charge of ICMS (Tax on Circulation of Goods and Services), IPVA, among others.
- Municipal: Responsible for taxes such as ISS (Service Tax), IPTU, among others.
Collection Models
| Regime | Description |
|---|---|
| Real Profit | Based on the company's net profit, taxed on the actual profit calculated. |
| Presumed Profit | Taxation based on fixed percentages of the company's turnover. |
| Simples Nacional | Simplified regime for micro and small companies, with unified taxation. |
| Individual Microentrepreneur (MEI) | Simplified regime for individual entrepreneurs with limited turnover. |
Tips to avoid problems with the tax authorities
- Get to know the Tax system: Keep up to date with tax legislation and rely on qualified professionals to help with tax management.
- Use technology: ERP software can facilitate tax control, ensuring greater accuracy and organization of tax information.
- Meet the deadlines: Keep up to date with tax obligations to avoid fines and penalties.
- Transparency and ethics: Avoid practices that could be interpreted as tax evasion. Transparency in operations is essential for building a relationship of trust with the tax authorities.
What are the consequences of not keeping regular bookkeeping?
Lack of regular bookkeeping can result in an undue reduction in the tax base, leading to lower payments than legally required. In addition, the absence of proper records can lead to severe assessments and penalties from the tax authorities.
How can you avoid problems during an inspection?
Keeping all accounting and tax records up to date and in compliance with current legislation is crucial to avoiding problems during an inspection. In addition, it is advisable to maintain transparent and proactive communication with the tax authorities, respond promptly to requests for information and documents, and rely on the support of professionals specializing in accounting and tax law.
Stay tuned: Tips on what to do when a tax auditor arrives at your company
The CLM Controller and Fiscal Management
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Conclusion
Maintaining efficient tax management that complies with the law is crucial to the success and sustainability of companies. Avoiding common mistakes such as omission of revenue, inconsistencies in inventory and errors in tax calculation is fundamental to avoiding problems with the tax authorities. Investing in technology and relying on trained professionals are indispensable strategies for ensuring tax compliance and avoiding penalties that can negatively impact the business.
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