With the deadline for filing income tax returns approaching, questions often arise, especially for those who are Individual Microentrepreneurs (MEI). "Do I need to file?" and "how do I file?" are probably the most frequent questions.
The most important thing for a self-employed individual (MEI) is to know how to differentiate between business profits and personal income. In addition, it's necessary to be aware of the new rule in 2021: should I declare the emergency aid I received?
Individual vs. Legal Entity
"We remind you that there are two 'pockets': that of the individual and that of the company," clarifies Silas Santiago, Public Policy Manager at Sebrae Nacional.
The Brazilian Federal Revenue Service considers that there are two types of taxpayers: individuals (CPF) and legal entities (CNPJ). "As a legal entity, the MEI (Individual Microentrepreneur) must submit, by May 31st of each year, the Annual Declaration of the Simples Nacional (Simplified National Tax System), the DASN-SIMEI," explains Silas.
However, as an individual, you may have to declare the income earned from the legal entity, that is, your own income, what you receive from the company and spend, for example, on food and housing.
“But, in most cases, this will not happen, because he may not have reached the minimum taxable amount, given that a good portion of what he 'receives' from the MEI company is exempt,” emphasizes the manager of Sebrae Nacional.
Under what circumstances should a MEI (Individual Microentrepreneur) file an Individual Income Tax Return (IRPF)?
For a micro-entrepreneur to file an income tax return, "the main condition is to have received taxable income in 2020 equal to or greater than R$ 28.559,70 throughout the calendar year," explains Silas. Dividing by the months of the year, the amount comes to approximately R$2.380,00 per month.
I'm a self-employed individual (MEI) and I received emergency aid: what now?
If the self-employed individual (MEI) received emergency aid and, excluding federal aid, had total taxable income exceeding R$22.847,76, they must not only declare it but also "repay the emergency aid," Silas points out.
The tax authorities estimate that 3 million Brazilians need to return the emergency aid payments. To declare the emergency aid, list the Ministry of Citizenship as the paying source, with CNPJ 05.526.783/0003-27.
Furthermore, it is worth noting that the rules for filing a tax return are constantly changing, and therefore, he warns: "it is essential to remain attentive to the existence of other parameters that may make filing mandatory."
The Brazilian Federal Revenue Service publishes the rules for filing income tax returns every year. The manual prepared by the agency for 2021 is available here.
What can happen if I don't file my income tax return?
“For micro-entrepreneurs, it is very important to be up-to-date with tax obligations such as the monthly DAS (Simplified Tax Collection Document) and the DASN-SIMEI (Simplified Annual Declaration for Individual Micro-entrepreneurs), to avoid penalties that can range from fines to the declaration of CNPJ (National Registry of Legal Entities) ineligibility, which can prevent the issuance of invoices,” explains Silas Santiago.
For this year, the Federal Revenue Service estimates receiving 32 million tax returns by the deadline. And, to help you avoid any errors, we've prepared this step-by-step guide!
Art: Gabriel Gomes
O The deadline is May 31st. And if you haven't planned ahead yet, it's a good idea to pay attention so you don't end up in debt with the taxman!
