Here are 5 options for companies to reduce taxes.

The crisis is affecting a large number of companies, and at this time the watchword is cost reduction. However, one way to reduce expenses that few companies apply correctly is tax planning. Studies indicate that companies pay up to 34% in taxes on profits, but every business owner knows that these amounts are much higher when other issues such as labor costs, fees, and other obligations are considered.

Therefore, if a company intends to survive the crisis, it is essential to seek reductions in accordance with the frequent tax changes to which it must adapt in the country, better managing its taxes and obtaining greater profitability in its business. According to Richard Domingos, executive director of Confirp Contabilidade, "with the high taxation in Brazil, in addition to having to face companies that operate informally, many companies go bankrupt with high tax debts. Thus, it is worth mentioning that tax avoidance is legal."

There are several ways to reduce these costs, so Confirp has listed some:

Tax planning - There are three main types of taxation: Simples Nacional (Simplified National Tax Regime), Presumed Profit, or Actual Profit. The director of Confirp explains that "the choice of taxation method that the company will use in the next fiscal year can be made until the beginning of the following year, but analyses should be carried out in advance to ensure the correct choice, reducing the chances of errors." It is important to emphasize that each case must be analyzed individually, highlighting that there is no exact model for carrying out tax planning since there are several variables.

"In simplified terms, tax planning involves the analysis and application of a set of actions related to business transactions, legal acts, or material situations that result in a lower tax burden and, therefore, a greater economic outcome. This is typically applied by legal entities with the aim of reducing their tax burden," explains Domingos.

Tax recoveries - Within the complex Brazilian tax system, improper charges often occur, leading to a considerable increase in the tax burden. Therefore, companies must be aware of the credits they are entitled to, and this will depend heavily on their area of ​​operation. Among the taxes that can be recovered are payments related to PIS/Pasep, Cofins, IPI, and ICMS, among others, which will contribute to reducing the total amount of taxes. Another issue to consider is the offsetting of taxes collected improperly.

Legal and tax consulting firms should be hired to identify potential credits that were not considered in the monthly calculation due to a lack of sub-legal regulations. This is because these credits can be challenged administratively by the tax authorities, and all risks must be considered before any decision is made. Caution should be exercised with many companies that offer this type of service solely for the purpose of immediate commission on proposed tax reductions or offsets, leaving the business owner with all the operational risk.

Tax incentives - Companies can use tax incentive tools, which are instruments aimed at the economic development of a specific region or sector of activity. This involves reducing mandatory public revenue or eliminating its enforceability.

There are several ways that companies can use this form of incentive, ranging from supporting third-party initiatives, such as sports and culture, to laws aimed at regional growth that significantly reduce the amounts to be paid; however, in these cases, it is also necessary to have expert guidance.

Correct Classification in the National Classification of Economic Activities - CNAE - Most companies don't realize it, but from their inception they are already committed to a fundamental error: their registrations with government entities do not reflect their actual activities. One of the mistakes that leads a company to have serious tax risks is an inadequate CNAE, and worse, they only realize this error when problems begin to appear. But, more than that, choosing the right CNAE will impact the tax burden to be paid.

Another very important issue is that when a company is under the wrong CNAE code, the chances of incorrect taxes being applied, with divergent rates, are very high, and if this is discovered during an audit, the result could be heavy fines.

FAP Reduction - The FAP is an index applied to the Contribution of the Degree of Incidence of Work-Related Disability due to Environmental Risks at Work, and represents a significant portion of companies' labor costs, varying depending on the number of occurrences and the industry.

However, what many business owners don't know is that these amounts can be minimized by filing administrative appeals to have the government's charges reviewed, thus securing a reduction in costs and allowing them to plan for the future with this reduced expense.