Simples, Lucro Presumido or Lucro Real: How to Choose the Best Tax Regime

Choosing your tax regime is one of the most impactful decisions you’ll make when opening your company. The regime determines how much tax you’ll pay every month — and that decision follows the company for its entire life. Paying more than necessary is a common and avoidable mistake. To understand every step of incorporation before choosing the regime, see the complete guide to opening a company. Vivian Sampaio, an accountant and lawyer with more than 26 years of experience, explains the three regimes, the rates and how to choose.

Why the choice directly impacts profit

Taxes can represent between 15% and 35% of your company’s revenue, depending on the regime and the activity. For a company with annual revenue of R$ 500,000, that difference can reach R$ 100,000 a year — an amount that makes a real difference in cash flow and in the ability to reinvest.

Choosing the wrong regime isn’t just a matter of paying more tax. It also means losing the chance to invest money that could be growing the business.

Understanding the three regimes

Simples Nacional (simplified tax regime)

Simples Nacional is the unified regime for micro and small businesses. Under it, all taxes (IRPJ, CSLL, COFINS, PIS, ICMS, ISS) are paid in a single monthly slip — the DAS. The rate varies according to the activity and revenue, but the goal is to simplify management and reduce the burden for smaller companies.

Who can adopt it:

Companies with annual revenue of up to R$ 4,800,000 (for new companies or those that haven’t yet exceeded that limit)
Companies with activities permitted under Simples Nacional (the list is available on the Receita Federal website)
Limited liability companies (LTDA), single-member companies (SLU), individual entrepreneurs and MEI (individual micro-entrepreneur)

Lucro Presumido (presumed-profit regime)

Lucro Presumido is based on a profit margin presumed by law over revenue. Taxation falls on that margin, not on actual profit. It’s suited to companies with high profit margins, where the tax calculated on the presumption comes out lower than what they would pay on actual profit.

Who can adopt it:

Companies with annual revenue above R$ 4,800,000 (that have exceeded the Simples limit)
Companies with activities that allow profit presumption (trade, industry, general services)
Companies that don’t fall under the rules for mandatory Lucro Real

Lucro Real (actual-profit regime)

Lucro Real falls on the company’s effective profit — what’s left after deducting all costs and expenses. It’s mandatory for some activities and optional for others. Companies with low margins or high cost deductibility tend to benefit.

Who must use it mandatorily:

Companies with annual revenue above R$ 78 million
Financial institutions, insurers, brokerages
Companies with profits abroad
Specific activities regulated by law

Comparing effective rates

The effective rate is the real percentage you pay on revenue, taking all variables into account. Here’s the comparison:

The Simples Nacional rate varies according to the annex that applies to your activity:

Annex I (trade): rates from 2.75% to 19%
Annex II (industry): rates from 3.5% to 19%
Annex III (services): rates from 6% to 19%
Annex IV (services): rates from 4.5% to 19%
Annex V (services): rates from 15.5% to 19%

Simples Nacional — when it’s the best choice

Simples Nacional is usually the best option when:

The company earns up to R$ 4,800,000 per year
The effective Simples rates are lower than those of Lucro Presumido for your activity
The company has high operating costs that would reduce actual profit
The simplicity of a single monthly slip is valued

Practical example: A technology company that earns R$ 300,000 a year with costs of R$ 180,000 (infrastructure, teams, tools). Under Simples Nacional (Annex III), the rate is around 6%. Under Lucro Real, it would pay IRPJ + CSLL on the R$ 120,000 profit. Depending on the exact calculation, Simples may be more advantageous.

Lucro Presumido — when it’s the best choice

Lucro Presumido is suited when:

The company’s profit margin is high (above 30% of revenue)
The company has few deductible costs
The company has exceeded the Simples Nacional ceiling
The effective Lucro Presumido rates are lower than those of Simples for that revenue range

Practical example: A law firm that earns R$ 800,000 a year with relatively low deductible costs (R$ 150,000 in fees, office, tools). Lucro Presumido uses a 32% margin on revenue, which results in a smaller calculation base than actual profit would be.

Lucro Real — when it’s mandatory or advantageous

Lucro Real is needed when:

The law requires it: companies with annual revenue above R$ 78 million, financial institutions, insurers, brokerages, factoring firms and companies with profits, income or capital gains abroad must adopt Lucro Real, with no choice.
The company has very high deductible costs that make actual profit much lower than the presumed one
The company wants to maximize the deductibility of expenses

Practical example: A consultancy that earns R$ 2,000,000 a year and has high costs of R$ 1,600,000 (team, office, tools, travel). Under Lucro Real, it pays tax on R$ 400,000 of profit. Under Simples, it would pay on all revenue at higher rates. Lucro Real may be more efficient.

Tax Substitution and special regimes

Some sectors have special taxation rules that affect the choice of regime:

Tax Substitution (ST): the tax is withheld along the production chain, advancing the payment of ICMS. It mainly affects trade in specific goods (beverages, medicines, construction materials).
Special regimes: some activities receive differentiated tax treatment, such as companies in healthcare, education and civil construction. In these cases, the choice of regime must take those specific rules into account.

How to change regimes mid-year

In practice, this switch almost never works as a free change “for the following month.” The tax regime is a decision tied to the calendar year and to the situations provided for by law.

Leaving Simples Nacional by choice: the company can notify its exclusion at any time, but the effect usually isn’t immediate. If the notice is given in January, the exit takes effect on January 1 of that same year. If given in the other months, the normal effect is January 1 of the following calendar year.
Lucro Presumido: the option is definitive for the entire calendar year. In other words, a company that started the year on Lucro Presumido, as a rule, stays on it until December.
Lucro Real: the option is declared in the first assessment period of the year, normally in January or at the start of activity. For this reason, voluntary migration to Lucro Real is also usually planned for the beginning of the year, not for the following month.

There are operational exceptions, such as mandatory exclusion from Simples for disqualification, excess revenue or other situations provided for by law. In these cases, the effect may change according to the reason for exclusion. The safe path is to treat the switch as a tax-planning decision, with a prior simulation and review by the accountant before filing any notice.

FAQs

How do I know which regime is best for my company?

The most reliable way is to run a simulation with an accountant. The simulation considers projected revenue, operating costs, the activity sector and growth projections. For companies opening now, the best approach is to make a realistic revenue estimate and calculate which regime results in lower tax. To understand why the accounting professional is decisive at this stage, see the importance of the accountant in opening your company.

Can I change regimes if my revenue changes?

As a rule, a voluntary change is planned for the start of the calendar year. Under Simples, leaving by choice only takes effect on January 1 of that same year if notified in January; in the other months, on January 1 of the following year. Mid-year changes tend to appear in mandatory exclusions or specific situations under the law, so a simulation with an accountant is indispensable.

Is MEI part of Simples Nacional?

Yes. The MEI (individual micro-entrepreneur) is automatically an opt-in member of Simples Nacional. The monthly contribution (DAS) is the way MEI pays into Simples.

Does Simples Nacional have the same taxes as the other regimes?

Yes. Simples is a unified way to pay the same taxes (IRPJ, CSLL, COFINS, PIS, ICMS, ISS). The difference is that everything goes into a single slip with rates differentiated by activity and revenue range.

Which regime is best for a technology company?

It depends on revenue and cost structure. Technology companies with high team costs (developers, infrastructure) often benefit from Simples Nacional (Annex III) when revenue is still within the limit. When revenue exceeds a certain threshold, Lucro Real may be more efficient because it allows more deductions. The simulation is mandatory.

Want to know which regime will save you the most in your case? The VMAHUB team can run a complete simulation based on your projected revenue and cost structure. Talk to an accountant on WhatsApp.

If you’re opening a company and still don’t know which format to choose, check out our comparative guide between MEI and LTDA.

If the next decision is to reduce your burden safely and not just choose an initial classification, understand how tax planning works.

To explore all the hub’s guides on regimes, company formation and management, start with the introduction to the Naprática hub.

Vivian Sampaio is an accountant, lawyer, author, mentor and speaker with more than 26 years of experience in accounting and law. Founder of VMAHUB.

Tags: Tax Regime, Simples Nacional, Lucro Presumido, Lucro Real, Company Formation