Microenterprises to Choose Between Tax Reform Regimes in September

Micro and small businesses under the Simples Nacional regime must decide in September whether to remain fully within the simplified system or opt for a new hybrid model created by tax reform starting in 2027. Those who choose to stay in the simplified regime will be enrolled automatically. Those opting for the hybrid model must notify the Simples Management Committee between September 1 and September 30, with another decision window scheduled for March.

Under the simplified option, the single tax guide will replace extinct taxes such as PIS, Cofins, and in some cases IPI, with the new federal CBS and state and municipal IBS while maintaining the current tax burden. This path is generally considered best for businesses whose clients are primarily individuals. In contrast, the hybrid model requires CBS and IBS to be collected separately. While the CBS rate is estimated at around 9 percent, which is generally higher than the simplified rate, the hybrid model allows for the desoneration of business expenses such as rent, energy, and outsourced services. This may allow companies to increase margins or reduce prices.

The hybrid model is suggested for businesses in the middle of production chains, such as input suppliers or service providers for other companies. However, experts state there is no general rule and each case must be analyzed individually. While the hybrid model increases taxation on sales, it allows corporate clients to recover taxes through credits. To mitigate the increased complexity of tax management in the hybrid system, the Federal Revenue Service has promised to provide pre filled declarations.

Because many of these companies lack fiscal departments or resources for specialists, they will likely rely on accountants and entrepreneur support agencies. In some instances, the choice may be dictated by the requirements of the contracting client.