Companies pay R$5 billion more in taxes; check main errors

Report from Forbes showed the main points inherent to the complexity of the Brazilian tax system that lead to the payment of taxes higher than what is actually due. The report spoke with Dr. Marcos Correia Piqueira Maia, partner in the tax law area at Maneira Advogados, about the topic.

Companies pay R$5 billion more in taxes; check out main errors

Complex taxation and lack of planning result in payments exceeding what is owed to the tax authorities

Poliana Santos

Brazil is the second country that taxes companies the most in the world, second only to Malta, according to a survey carried out by the CouponValido discount platform. In addition to facing this high tax burden, Brazilian companies are paying more taxes than they should. Another survey conducted by e-Auditoria with 52 thousand companies found that, since 2018, they have paid R$5.5 billion more than they should. The average is R$104 thousand in excess per CNPJ.

According to tax experts, this happens due to the country's tax complexity, which has a very high volume of changes in legislation. To illustrate, beer taxation has had a total of 165 thousand changes since 2018. Fuels alone, at the state level, have had 141 changes in 2022 and 2023. In this scenario, it is practically impossible to follow all these changes without the help of professionals.

The diversity of taxes and the involvement of different federal entities that promote collection and inspection result in a variety of tax laws and obligations. “The complexity of the legislation prevents taxpayers from recognizing all the tax credits to which they would be entitled, paying more than they should”, says Marina Chaves, specialist in tax law at Briganti Advogados.

Due to constant changes, it is common for companies to incorrectly classify their goods, generating serious consequences. Incorrect completion leads to a tax assessment, in which the company is obliged to retroactively pay the taxes due, plus interest and fines.

The fines generated by these errors can be extremely heavy, reaching up to 1% of the legal entity's gross revenue in the period to which the digital tax record (EFD) refers, a file that constitutes a set of tax documents. “A company that has gross revenue of R$1 million per month would be subject to a fine of R$10,000 per file”, says Frederico Amaral, CEO of e-Auditoria.

Check out four tax practices that make companies pay more taxes than they should:

#1 – Not carrying out tax planning

The current Brazilian tax system is made up of complex legislation, full of exceptions and tax benefits that are often not taken advantage of due to simple ignorance on the part of the taxpayer.

“Most companies do not carry out tax planning that adopts the most advantageous options provided for by law”, says Amaral.

#2 – Not keeping up to date

The existence of several taxing entities, together with the lack of harmonization and uniformity in their laws, leads taxpayers to face a large number of obligations. This is because taxpayers need to comply with a variety of regulations imposed by the Union, the states and more than 5,500 municipalities, and each of these entities has the right to demand compliance with these obligations in accordance with their own rules.

“The lack of updates on changes in tax legislation can lead companies to make mistakes that result in undue tax payments”, says Marcos Maia, partner at Maneira Advogados in the area of Tax Law.

#3 – Inattention when delivering documents

Lack of attention when filling out tax documents can lead companies to mistakes that result in undue tax payments.

#4 – Illegal tax

In Brazil, due to tax complexity, unconstitutional taxes are often imposed. The natural thing would be that, after recognition of unconstitutionality, taxpayers could recover the amounts that were unduly taken.

“Many taxes, fees and contributions are charged illegally or unconstitutionally, with a small number of taxpayers seeking their rights. All those who do not legally question certain tax requirements end up collecting more taxes than they should”, says Amaral.

https://forbes.com.br/forbes-money/2023/10/empresas-pagam-r-5-bilhoes-a-mais-de-impostos-confira-principais-erros/