Taxes can take a significant portion of a small business’s income, but there are legal strategies to reduce your tax burden. In this article, we’ll explore how Brazilian entrepreneurs can pay less in taxes while staying compliant with the law.
1. Choose the Right Tax Regime
📌 MEI: Best for solo entrepreneurs earning up to BRL 81,000 per year with a fixed low tax
📌 Simples Nacional: Ideal for small businesses with revenue up to BRL 4.8 million per year
📌 Lucro Presumido: Works for businesses with higher revenue and stable profit margins
Switching to the most advantageous regime can significantly lower your tax payments.
2. Deduct Allowable Business Expenses
✅ Office rent and utilities
✅ Employee salaries and benefits
✅ Marketing and advertising costs
✅ Equipment and office supplies
Keeping proper records of these expenses allows tax deductions, reducing taxable income.
3. Separate Personal and Business Finances
📌 Open a business bank account
📌 Use separate credit cards for business expenses
📌 Track all revenue and costs properly
This prevents tax complications and ensures maximum deductions.
4. Stay Up-to-Date with Payments
Late payments increase costs due to fines and interest. Set up automatic payments for:
✅ DAS (MEI and Simples Nacional)
✅ INSS and FGTS for employees
✅ Municipal and state taxes
5. Work with an Accountant
An accountant can:
📌 Optimize your tax payments
📌 Ensure compliance with tax laws
📌 Identify extra deductions you may have missed
Conclusion
Small business owners can legally reduce taxes by choosing the right tax regime, deducting business expenses, and staying organized. With proper planning and professional guidance, it’s possible to maximize profits while staying compliant.
