Many Brazilian entrepreneurs make tax decisions based on misconceptions, which can lead to higher taxes or legal issues. In this article, we’ll debunk common tax myths and provide the correct information to help small business owners.
1. Myth: MEI Entrepreneurs Don’t Need to Pay Any Taxes
❌ False! MEI business owners must pay a monthly DAS tax, which covers INSS, ICMS, or ISS.
✅ Truth: While MEI taxes are lower and fixed, they still need to be paid on time to avoid fines.
2. Myth: If You Don’t Issue an Invoice, You Don’t Need to Pay Taxes
❌ False! Even if you don’t issue invoices (Notas Fiscais), your revenue is still taxable.
✅ Truth: Keeping accurate financial records is essential to avoid audits and penalties.
3. Myth: You Can Remain as MEI Even If You Exceed the Revenue Limit
❌ False! If your revenue exceeds BRL 81,000 per year, you must upgrade to a Microenterprise (ME).
✅ Truth: Not transitioning to the correct tax category can result in retroactive tax charges.
4. Myth: Simples Nacional Means No Bureaucracy
❌ False! While Simples Nacional simplifies tax payments, businesses still need to keep records and comply with tax rules.
✅ Truth: Hiring an accountant ensures compliance and helps reduce tax payments.
Conclusion
Believing in tax myths can lead to financial losses and legal problems. Entrepreneurs should rely on accurate tax knowledge and professional guidance to optimize taxes legally.
