Many small business owners in Brazil overpay taxes simply because they don’t take advantage of tax deductions. Knowing which expenses you can deduct can help you save money legally. In this article, we’ll cover the most important tax deductions for Brazilian entrepreneurs.
1. What Are Tax Deductions?
A tax deduction is an expense that reduces your taxable income, lowering the amount of taxes you need to pay. Depending on your tax regime (Simples Nacional, Lucro Presumido, or Lucro Real), you may be able to deduct different costs.
2. Deductible Expenses for Entrepreneurs
Here are some common deductible expenses for small business owners in Brazil:
a) Business Rent and Utilities
If you rent an office, store, or commercial space, you can deduct the rent, electricity, water, and internet bills.
b) Employee Salaries and Benefits
If you have employees, you can deduct:
✅ Salaries
✅ INSS (Social Security Contributions)
✅ FGTS (Severance Fund Contributions)
c) Equipment and Office Supplies
Buying computers, furniture, and office supplies for your business? These can be deducted as necessary operational expenses.
d) Marketing and Advertising Costs
✅ Facebook, Instagram, or Google Ads
✅ Business website costs
✅ Printing business cards and flyers
e) Transportation Expenses
If you use a vehicle exclusively for business, you can deduct:
🚗 Fuel and maintenance
🚗 Parking fees
🚗 Business travel expenses
f) Professional Services
Hiring an accountant, consultant, or lawyer for your business? Their fees can be deducted as operational expenses.
3. How to Claim Tax Deductions?
To deduct expenses, you must:
1️⃣ Keep all invoices and receipts
2️⃣ Ensure expenses are business-related
3️⃣ Work with an accountant to classify deductions correctly
Conclusion
Understanding tax deductions helps entrepreneurs reduce tax payments legally. By keeping proper records and knowing what’s deductible, you can maximize your savings and grow your business.
