Simples Nacional Explained: Rates and Who Can Opt In

The Simples Nacional is Brazil’s simplified tax regime for micro and small companies — an ME or an EPP with revenue up to R$ 4.8 million a year. It merges eight federal, state and municipal taxes into a single monthly payment, the DAS, and the rate depends on the activity and the revenue: it starts at 4% for commerce and reaches up to about 33% for the highest service brackets. Which of the five annexes applies, and whether the Fator R lowers the rate, is defined by the accountant — a traditional firm or an online accounting service — when the company opts in.

What the Simples Nacional is

The Simples Nacional replaces separate tax payments with one monthly slip, the DAS (Documento de Arrecadação do Simples Nacional), that bundles eight taxes: the federal IRPJ, CSLL, PIS/Pasep, COFINS, IPI and CPP (the employer social security), the state ICMS and the municipal ISS. It is open to a microempresa (ME), with revenue up to R$ 360,000 a year, and to an empresa de pequeno porte (EPP), from there up to R$ 4.8 million. The MEI is a separate simplified track (SIMEI) for revenue up to R$ 81,000. Above R$ 4.8 million, a company must move to Lucro Presumido or Lucro Real the following year.

There is also a sublimit of R$ 3.6 million: a company earning between that and R$ 4.8 million stays in the Simples Nacional for the federal taxes but pays the ICMS and the ISS separately, outside the DAS.

Who can opt in

Any ME or EPP within the R$ 4.8 million ceiling can opt in, as long as its activity and ownership are not on the list barred from the regime. A new company chooses the regime during registration — now in the Receita Federal’s MAT step, before the CNPJ is issued — while a company that is already running can request the Simples Nacional at the start of the calendar year.

Brackets and rates: the five annexes

The rate rises across six revenue brackets, from up to R$ 180,000 in the first band to the R$ 4.8 million ceiling in the sixth. Which annex applies depends on the activity:

These are the nominal rates for each band; the effective rate a company actually pays is lower, because each bracket carries a fixed amount to deduct.

The Fator R

Some services can fall under Annex III or Annex V, and the Fator R decides which. It is the payroll of the last 12 months — including pro-labore and charges — divided by the revenue over the same period. If that ratio is 28% or more, the company is taxed under Annex III, which starts at 6%; below 28%, it falls under Annex V, which starts at 15.5%. For service companies, the payroll level is therefore a real lever on the tax bill, and one an accountant reviews month to month.

Frequently asked questions

What is the Simples Nacional? A simplified tax regime for micro and small companies (ME and EPP) that bundles eight federal, state and municipal taxes into one monthly payment, the DAS, with revenue capped at R$ 4.8 million a year.

Who can opt for the Simples Nacional? An ME or an EPP within the R$ 4.8 million ceiling whose activity and ownership are not barred from the regime. New companies choose it during registration; running companies opt in at the start of the year.

How much tax does the Simples Nacional charge? It depends on the activity and the revenue. Rates start at 4% for commerce, 4.5% for industry and 6% for most services, and rise with revenue up to about 33% in the highest service brackets — all paid in the single DAS slip.

What is the Fator R? The ratio of payroll to revenue over 12 months. At 28% or more, a service company is taxed under Annex III (from 6%) instead of Annex V (from 15.5%), so it lowers the rate for payroll-heavy service businesses.