Income Tax: how should the MEI declare it? See tips – 03/28/2023 – Market

Brazil has more than 14.8 million MEIs (individual micro-entrepreneurs), according to data from Sebrae (Brazilian Support Service for Micro and Small Companies) in January, and part of them will have double work to declare the 2023 Income Tax.

The declaration as a legal entity is mandatory, but if it reaches any of the rules provided for in the legislation, the submission of the IR as an individual must also be done. In both cases, the deadline ends on May 31.

According to experts, forgetting one of the statements (individual or legal entity) is one of the main mistakes of MEIs. “The person made the declaration as CNPJ and forgets the CPF, or vice versa. Just doing the legal one does not solve it, if you have an obligation to make the natural person”, explains Edilson Conrado Ferreira Junior, vice president of CRC-RJ (Regional Accounting Council of Rio de Janeiro).

Among the conditions that may oblige the micro-entrepreneur to submit the declaration, the main one is the taxable income.

“If the sum of his income as MEI and all the other income he received is above R$ 28,559.70, he also needs to declare it as an individual”, says Elvira de Carvalho, specialist in Income Tax at King Contabilidade.

But there are other conditions that oblige the citizen to declare and it is necessary to pay attention to all of them. See below what they are.

---

Taxpayers who, in 2022:

• Received taxable income above BRL 28,559.70, which includes salary, retirement and pension from the INSS or public bodies

• Received exempt income, non-taxable or taxed exclusively at source (such as savings income or FGTS) above BRL 40,000

• Had a capital gain (ie, profit) on the sale (transfer of ownership) of goods or rights subject to the levy of tax; This is the case, for example, of the sale of a car with a value greater than the amount paid for the purchase.

• Was exempt from IR on capital gain on the sale of residential properties, followed by the acquisition of another residential property within 180 days

• Performed operations on the Stock Exchange above R$ 40,000 or made a profit from the sale of shares subject to the levy of tax

• Had, on December 31, possession or ownership of goods and rights, including bare land, in excess of R$ 300,000

• Obtained gross revenue in rural activity in an amount greater than R$ 142,798.50

• Do you want to offset losses from rural activity in 2022 or previous years

• He moved to Brazil in 2022 and was in that condition on December 31, 2022

---

Do the math to find out if you need to declare as an individual

The micro-entrepreneur will have to do some calculations to be sure if his taxable income will require the declaration. It is necessary to make two calculations, one of them to find the value of exempt income, which is free from Income Tax collection, and the other subtracting expenses, to arrive at the evidenced profit.

For those who have a cash book, it’s easier. “The Revenue does not oblige an accountant to sign nor does it ask for the presentation of the cash book. But if the Revenue requests it, the data must be correct. If not, the declaration goes to the fine mesh”, warns Ferreira Junior.

But what if MEI does not have a cash book?

If you do not have a cash book, the micro-entrepreneur will have to calculate the taxable income he obtained as a MEI. Both the profit evidenced and the exempt portion are calculated on the gross income in the year.

It is necessary to add up all the gross annual income and then deduct expenses with telephone, water, electricity, among others, to find the profit shown. Then, on the gross annual income, the calculation is applied to find out what the presumed profit was, which will be exempt from income tax and varies according to the type of activity.

See the percentages that guarantee exemption from Income Tax:

• 8% of gross revenue for commerce, industry and cargo transport activities
• 16% of gross revenue for passenger transport
• 32% of gross revenue for services in general

After this calculation, the MEI will have the taxable income in the year, which will make it obligated to declare or not. See examples:

Service provider

Transactions	Amounts (in BRL)
annual gross income	79,890
Expenses (rent, telephone, supplies, etc.)	23,570
Evidenced profit (gross income – expenses)	56,320
Exempt portion (32% of gross revenue)	25,564.80
Taxable income (evidenced profit – exempt portion)	30,755.20

Merchant

Transactions	Amounts (in BRL)
annual gross income	79,890
Expenses (rent, telephone, supplies, etc.)	23,570
Evidenced profit (gross income – expenses)	56,320
Exempt portion (8% of gross revenue)	6,391.20
Taxable income (evidenced profit – exempt portion)	49,928.80

^{Source: Elvira de Carvalho, King Contabilidade}

In both cases, as the taxable income exceeds BRL 28,559.70, the MEI will have to file the individual’s income tax return.

“This account is one of the most common mistakes. It is also important that if the taxpayer has a dependent who has MEI, it is better for each one to make their declaration to avoid a high tax burden”, says Elvira.

How to declare?

The first step is to download the 2023 Income Tax program on your computer. From March 15th, it will be possible to complete and deliver on other platforms as well. The second step is to fill in all the necessary forms, such as taxpayer identification, income, assets and rights, in addition to payments made and debts, if any.

Exempt income, that is, the portion of gross revenue to which the percentage was applied according to the activity, goes on the Exempt and Non-Taxable Income tab. The taxable income is declared on the form with the same name.

See what to do:

1. In the Declaration Sheets item, go to the Taxable Income Received from Legal Entity sheet

2. Click New

3. Fill in the name of the MEI, the CNPJ and the amount of taxable income that was calculated. The other fields are set to zero. click ok

4. Then, go to the Exempt and Non-Taxable Income tab and click on New

5. Select code 13 (income of a member or holder of a micro-enterprise or small business opting for Simples Nacional)

6. Fill in the name of the MEI, the CNPJ and the amount of the tax exemption that was calculated according to the percentage and click on Ok

After these steps, the taxpayer must continue his individual declaration with the inclusion of all other requested data, such as assets, financing and debts, if any, bank account values, data on dependents and payments made, which guarantee deductions.

When finished, if you have tax to refund, indicate the bank and the payment method. It is also possible to receive the refund by Pix, which guarantees the taxpayer to enter the priority queue.

If there is tax to be paid, it is possible to pay it in up to eight installments. The Darf (Federal Revenue Collection Document) is paid monthly and can be automatically debited from the first installment. For this, it is necessary to declare the IR until May 10.

EXPIRATION OF INCOME TAX SHARES

Dates for those who have tax to pay

• Option for automatic debit of the first installment or single installment: until May 10

• Maturity of the 1st installment or single installment: until May 31

• Maturity of other quotas: last business day of each month, until the eighth quota on December 28

• Darf payment for those who donate tax to child, adolescent and elderly funds: until May 31

Declaration as a legal entity

However, the service of those who are microentrepreneurs does not end there. The MEI must obligatorily make the declaration as a legal entity through the DANS-SIMEI (Simplified Annual Declaration for the Individual Microentrepreneur). The deadline for submission is May 31, under penalty of paying a minimum fine of BRL 50 or 2% of the total amount of taxes declared per month of delay.

“The billing limit is BRL 81,000 per year, of which BRL 6,750 per month. The MEI adds up everything it received in the year, indicates how much it billed and whether it has employees. The declaration is mandatory even if there is no movement in the year”, warns Elvira de Carvalho.

Ask questions about the IRPF 2023

What documents are needed to declare the Income Tax?

The most important document is the income statement from paying sources, including the INSS retirement statement. Also have other documents in hand, such as medical receipts, proof of withdrawal from the FGTS (Senior Severance Indemnity Fund), if applicable, vehicle document, property documentation, rent receipts received, among others.

Who is entitled to the refund?

The Income Tax refund is the return of the amount of tax paid in excess by the taxpayer during the calendar year, which in this case is the year 2022. The calculations to find out if there is a tax refund, if the balance is zeroed, or if it is necessary to pay IR, they are done by the program for completing and sending the declaration.

The amounts are paid in batches. The date of receipt will depend on whether the taxpayer is a priority or not and when the declaration was submitted. The correction of values ​​is based on the basic interest rate of the economy, the Selic.

Income Tax refund payment schedule 2023

Batch	Pay day
1st	may 31st
2nd	June 30
3rd	July 31st
4th	August, 31
5th	September 29th

What to do to not fall into the fine mesh?

The taxpayer required to declare the Income Tax must be very careful when reporting income and expenses to the Federal Revenue Service. Any error can take you to the fine mesh, which causes the statement to be withheld, without the release of the refund, and there is still the possibility of being fined.

In order not to make a mistake, you must inform all income received in the year, such as salary, odd jobs or rent, for example, including retirement and pension, if applicable. Also report the income of dependents. In addition, it is necessary to pay close attention even to the declared commas and zeros.

Another tip is to deduct only what is allowed by legislation in spending on health, education, private pension and official pension, among others.