Running a small business in Brazil comes with several tax responsibilities, and making mistakes can lead to fines, penalties, and financial losses. In this article, we’ll highlight the most common tax mistakes small business owners make and how to avoid them to stay compliant and save money.
1. Not Paying the Monthly DAS on Time
✔ Why It’s a Mistake: MEIs and Simples Nacional businesses must pay their DAS tax every month. Missing the deadline leads to late fees and interest charges.
✔ How to Avoid It: Set up automatic payments or reminders for the 20th of each month to ensure on-time payments.
2. Mixing Personal and Business Finances
✔ Why It’s a Mistake: Using the same bank account for personal and business expenses makes it difficult to track business-related costs and tax deductions.
✔ How to Avoid It: Open a separate business account and keep detailed records of transactions.
3. Not Issuing Invoices (Notas Fiscais) Correctly
✔ Why It’s a Mistake: Some businesses fail to issue invoices (NF-e) or do not report all sales, which can lead to fines and audits.
✔ How to Avoid It: Always issue Notas Fiscais, especially for B2B transactions, and keep a digital record for tax purposes.
4. Exceeding the MEI Revenue Limit Without Upgrading
✔ Why It’s a Mistake: If an MEI earns more than BRL 81,000 per year and does not transition to Simples Nacional, they must pay retroactive taxes and penalties.
✔ How to Avoid It: Track monthly revenue carefully, and if you approach the limit, plan a transition to Simples Nacional before exceeding it.
5. Forgetting the Annual MEI Declaration (DASN-SIMEI)
✔ Why It’s a Mistake: MEIs must submit an annual revenue declaration (DASN-SIMEI). Forgetting to file results in fines and possible CNPJ suspension.
✔ How to Avoid It: Submit the DASN-SIMEI before May 31st each year through the gov.br platform.
6. Not Keeping Proper Accounting Records
✔ Why It’s a Mistake: Small businesses that do not track income and expenses properly risk misreporting taxes and facing audits.
✔ How to Avoid It: Use accounting software or hire an accountant to keep accurate financial records.
Final Thoughts
Avoiding these tax mistakes helps small business owners stay compliant, reduce unnecessary costs, and protect their business from legal issues. Staying organized, issuing invoices correctly, and keeping up with tax deadlines will ensure financial stability and long-term success.
