Small Business Tax in Brazil Confirm the cited source.

Brazil taxes small businesses under one of three simplified regimes depending on legal form, annual revenue, and business activity. Choosing the right regime requires understanding how each one bundles or separates federal, state, and municipal obligations.

For an overview of how Brazil's broader tax system affects residents and residents abroad, see the Brazil country overview.

01What is Simples Nacional and how are its rates structured?

Simples Nacional is the unified simplified tax regime created by Complementary Law 123/2006 and administered by the Receita Federal do Brasil (RFB). It consolidates up to eight taxes into a single monthly payment called the DAS (Documento de Arrecadação do Simples Nacional): federally, IRPJ, CSLL, PIS, COFINS, and IPI; plus the state ICMS and municipal ISS; and the employer's payroll contribution (CPP). Companies with annual gross revenue up to BRL 4.8 million are eligible, subject to activity restrictions. [1]

The regime is divided into five Anexos that assign companies by primary activity. Effective rates are progressive and are calculated using the formula: Effective Rate = (RBT12 x Nominal Rate - Deduction) / RBT12, where RBT12 is the trailing 12-month gross revenue. [1]

The table below shows the 2026 nominal rates and deductions per Anexo for the six revenue faixas (brackets). Rates for 2026 are unchanged from prior years; changes attributable to the tax reform take effect no earlier than 2027. [1][2]

Anexo I covers retail and commerce; Anexo II covers manufacturing; Anexo III covers installation, repair, travel agencies, and most professional services; Anexo IV covers construction, cleaning, surveillance, and legal services (CPP is excluded from the DAS for Anexo IV, paid separately); Anexo V covers IT, engineering, auditing, advertising, and consulting firms that do not qualify for the Factor R pathway into Anexo III. [1]

02What is MEI and who qualifies?

The Microempreendedor Individual (MEI) is a sub-category of Simples Nacional for individual solo entrepreneurs. Qualifying conditions as of 2026: annual gross revenue must not exceed BRL 81,000 (equivalent to BRL 6,750 per month on average); the business must have at most one employee paid at the legal minimum wage or the applicable category floor; and the activity must appear on the permitted MEI activity list published by the RFB. [3]

MEI pays a single monthly DAS-MEI contribution. For 2026, based on the minimum wage of BRL 1,621.00 established by Decree 12.797/2025, the INSS component is BRL 81.05 (5% of minimum wage). In addition: commerce and industry activities pay BRL 1.00 ICMS; service activities pay BRL 5.00 ISS; activities combining commerce and services pay both. Resulting monthly totals: commerce/industry BRL 82.05; services BRL 86.05; commerce-and-services BRL 87.05. Autonomous cargo transporters pay a higher INSS rate of 12% (BRL 194.52) in lieu of the standard 5%. [3]

If MEI annual revenue exceeds the BRL 81,000 ceiling by 20% or less (up to BRL 97,200), the entrepreneur transitions to Microempresa (ME) status within Simples Nacional starting January 1 of the following year. If the ceiling is exceeded by more than 20%, the transition to ME status is retroactive to January 1 of the same calendar year, triggering retroactive obligations. [3]

03How does Lucro Presumido work for businesses that outgrow Simples?

Lucro Presumido (presumed profit) is an optional quarterly regime available to companies with annual gross revenue not exceeding BRL 78 million. It calculates corporate income tax using a statutory presumed-profit margin applied to gross revenue, eliminating the need for detailed cost accounting. Presumption percentages vary by activity: 8% for commerce, goods sales, cargo transport, real estate, and hospital services; 16% for non-cargo transport; 32% for professional services, consulting, and other general services. [4]

IRPJ (Imposto de Renda Pessoa Juridica) is then levied at 15% of the presumed profit amount, plus a 10% surtax on the portion of quarterly taxable income exceeding BRL 60,000 (annual equivalent BRL 240,000). CSLL (Contribuicao Social sobre o Lucro Liquido) is levied at 9% on the presumed profit base. PIS and COFINS are collected under the cumulative regime at 0.65% and 3% respectively (combined 3.65%), without input tax credits. [4]

In 2026, Complementary Law 224/2025 and Normative Instruction RFB 2.306/2026 introduced an increase of 10 percentage points in the presumption margins for the portion of annual revenue exceeding BRL 5 million (quarterly threshold BRL 1.25 million). For IRPJ, this applies from January 1, 2026; for CSLL, from April 1, 2026, due to the constitutional 90-day notice requirement. The increase applies only to revenue above the threshold, not the total. This change is subject to ongoing judicial review as of mid-2026. [4][5]

04How does the 2026 tax reform interact with Simples Nacional?

Brazil's Constitutional Amendment 132/2023 and Complementary Law 214/2025 replace five existing taxes -- PIS, COFINS, IPI, ICMS, and ISS -- with a dual VAT structure composed of CBS (Contribuicao sobre Bens e Servicos, a federal levy) and IBS (Imposto sobre Bens e Servicos, a state and municipal levy), plus a Selective Tax (Imposto Seletivo) on specified goods such as tobacco, alcohol, and sugary beverages. The transition period runs from 2026 to 2033. [6]

For 2026, Simples Nacional companies -- including MEIs -- are fully exempt from collecting or remitting the test-phase CBS and IBS. Other regimes test symbolic rates of CBS 0.9% and IBS 0.1% for system validation purposes only; Simples and MEI firms are dispensed from those obligations entirely. XML fields for CBS and IBS are being added to electronic invoices (NF-e and NFC-e) for 2026 infrastructure readiness, but Simples firms have no effective collection duty. [6]

From 2027 onward, Simples Nacional companies will be required to itemise CBS and IBS on invoices. The unified DAS payment structure is preserved; however, businesses will have the option to elect the Simples Hibrido -- keeping all other taxes within the DAS while remitting CBS and IBS separately under the standard credit regime. This hybrid election enables buyers to claim full CBS/IBS input credits from Simples Nacional suppliers, resolving a competitive disadvantage that arises when Simples-regime suppliers generate only limited credits for their B2B customers. The opt-in window for the 2027 fiscal year opens between September 1 and September 30, 2026. [6]

The overall Simples Nacional regime is preserved through the reform; it is not being abolished. The internal composition of the DAS will shift gradually through 2033 as IBS and CBS phase in and ICMS and ISS phase out within the regime. [6]

Businesses affected by the reform should consult a qualified tax professional to assess whether the Simples Hibrido election aligns with their B2B customer requirements before the September 2026 opt-in window closes.