Tax Reform: lawyers and doctors will have a discount – 10/25/2023 – Market

The Senate Tax Reform rapporteur, Eduardo Braga (MDB-AM), gave in to pressure led by lawyers and decided to create an intermediate rate for regulated professions, with the aim of preventing them from having to pay the full tax.

The change will benefit professionals such as doctors, dentists, accountants, engineers, architects, as well as lawyers themselves. These categories will have a 30% reduction and will pay a rate equivalent to 70% of the full charge.

This means that, if the new taxes result in a 25% charge, as some estimates indicate, the professional services covered will be taxed at 17.5%.

These categories are now covered by more benevolent rules for the collection and payment of taxes and complained about the risk of a strong increase in burden after the Reform, as shown by Sheet.

Service providers in these areas have a tax benefit when collecting ISS (Service Tax). Instead of paying a rate of 2% to 5% on the service, professionals pay a fixed amount, even if they work in partnership (as long as they belong to the same class).

The charge varies depending on the municipality. In the city of São Paulo, according to public information, a uniprofessional society with seven members pays the equivalent of R$150.94 per person. With 24 professionals, the charge is R$473.78 per individual. There are cases where payment can reach R$800 per person.

The benefit applies to companies that are outside of Simples Nacional, which houses companies with revenues of up to R$4.8 million per year. In other words, whoever takes advantage of the incentive has earnings above that, but pays the fixed amount of tax.

Many of these companies are under the presumed profit regime, which also has other advantages, such as the reduced PIS/Cofins rate of 3.65%.

After intense lobbying, the professional classes managed to implement the change in the Tax Reform.

The version of the PEC (proposed amendment to the Constitution) approved by the Chamber of Deputies provided for three rates: standard, zero and a reduced rate, equivalent to 40% of the full charge (i.e., a 60% discount).

Now, the text provides for the possibility of a complementary law establishing operations benefiting from a 30% reduction on the standard rate (i.e., charging 70% of the general incidence), as long as they are “related to the provision of intellectual profession services, of a scientific, literary or artistic nature, as long as they are subject to supervision by professional advice”.

As shown by Sheetmembers of the Federal Council of the OAB (Brazilian Bar Association) were directly involved in articulating the change.

At the beginning of August, they met with the rapporteur and the president of the Senate, Rodrigo Pacheco (PSD-MG), who is a lawyer by training, to demand changes.