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Best Ways To Reduce The Tax Burden On Brazilian CompaniesPosted 21/10/2022
A study based on OECD data points out that Brazil is the second country, among a list of 111, that most tax companies. In fact, this is a subject that should be on the radar of businesspeople who intend to make investments in Brazil. After all, the high tax burden represents hindrances to the opening of new businesses, burdening operations, and hires. It is worth remembering that tax reform has been the subject of debates for some decades in Brazil.
With the run-up to the elections in the second half of this year, the reform of the national tax system, which should have been voted on in the first half, is now for 2023.
One of the benefits provided for in Constitutional Amendment Bill (PEC) 45/2019 is the extinction of numerous taxes levied on goods and services. But while the reform does not take place, it is interesting for investors to know other ways to reduce the tax burden.
To disseminate relevant information, Europartner, a tax accountant in Brazil, brought some tips in this article. Have a nice reading!
Choosing the right tax framework for your business
An important factor capable of helping to reduce taxes paid by the company is the assertive choice of tax framework. In certain cases, choosing the tax regime based only on invoicing is not a viable solution.
Therefore, we recommend that investors compare schemes such as Simples Nacional [Federal Simplified Tax System for Small Businesses], Presumptive Profit, and Taxable Income. In addition, it is worth seeking the guidance of a tax accountant in Brazil, a professional qualified to evaluate the best tax regime option for your business.
Thus, your company is correctly framed by paying as little tax as possible in a legal way.
Don’t delay paying taxes when investing in Brazil.
Delays in paying taxes are among the main mistakes made by entrepreneurs in Brazil. When delaying the discharge of tax obligations, taxes are subject to fines, interest, and charges.
But it is possible to avoid this type of error with efficient tax management, based on an always updated payment schedule. One solution, for example, is investing in an accounting system that helps you when collecting taxes and payment slips.
Certainly, this is the type of investment that is worth every penny. This allows your company to avoid delays that generate more costs.
Count on tax planning
Tax Planning is certainly an important step in the quest to legally reduce tax payments.
In monthly, semi-annual, or annual planning, structure the cash flow and rely on well-defined tools and indicators. Thus, it is possible to obtain a more complete view of the management of the business as a whole, which helps to identify the ability to pay the bills.
To carry out this structuring, bear in mind that a good tax accountant in Brazil can help. After all, the specialized professional will provide organized financial and accounting reports for a more assertive tax management.
Reduced management fees
If your company is included in the Taxable Income tax regime, there is the option to reduce the management fees. In addition, another possibility is the implementation of a system for distributing profits to all partners.
In time: this division of the company’s profits can be executed at any time. For this, it is enough that this item is in the contract, being described in a specific way.
In addition, profits must be included in accounting entries. Therefore, it is essential to have the support of professionals specialized in accounting and law when drawing up contractual clauses.
Efficient accounting management helps to reduce the tax burden.
By keeping accounting and tax data organized and centralized in a single structure, your company can reduce tax payments and avoid delays in submitting documentation.
With that in mind, don’t hesitate to look for a company specializing in accounting in Brazil. Europartner is a tax accountant with a qualified team, which serves numerous entrepreneurs interested in investing in Brazil.
To open a company and make investments in Brazil, talk to Europartner, your best tax accountant partner in Brazil!Author's post: Europartner Accounting