Tax Planning: Strategic Transition from Simples Nacional to Lucro Real in Internet Provider

Lorena Pereira dos Santos; Aline Araujo Perini

DOI: 10.22167/2675-6528-202603165

Article derived from a Course Conclusion Work (TCC), with content based on the student’s original work and adapted to the editorial format of the E&S Magazine with the support of the ResumeAI tool, an artificial intelligence solution developed by Instituto Pecege for textual synthesis and organization.

Summary

Tax planning has consolidated itself as a strategic tool for Brazilian companies in reducing the fiscal burden. The study aimed to analyze the efficiency of tax planning and the advantage of transitioning from the Simples Nacional regime to the Lucro Real for an internet provider located in São Paulo. An exploratory and descriptive case study was conducted, based on bibliographic and documentary research. The company’s accounting reports and sectoral data were analyzed to contextualize the internet provider segment, employing qualitative and quantitative approaches. The results of a tax burden simulation for the calendar year 2024 under both calculation regimes were compared. It was found that the regime migration did not generate a direct tax reduction, presenting a simulated tax burden in Lucro Real 63.11% higher than that of Simples Nacional. It was concluded that, although there was no immediate fiscal savings, the change represented a preventive tax planning measure. This strategic transition influenced financial and strategic management, preparing the company for new cycles of growth and transformation, especially in view of the consolidation of the provider market and the ongoing tax reform.

Keywords: Tax burden; Tax avoidance; Management; Providers; Tax system.

1. Introduction

The tax burden represents a considerable financial burden for entrepreneurs in Brazil. In 2023, the Gross Tax Burden (CTB) of the Federal Government corresponded to 32.44% of Brazil’s Gross Domestic Product (GDP), showing a slight decrease compared to the previous year (Tesouro Transparente, 2024). In the same period, the Impostômetro, a dashboard from the São Paulo Commercial Association (ACSP), indicated that tax revenue across the three spheres of government reached, for the first time in almost twenty years, the mark of R$ 3 trillion, a significant increase compared to R$ 2.8 trillion in 2022 (Impostômetro, 2023). This scenario of high taxation directly impacts companies, where the tax cost constitutes a significant portion for the continuity and expansion of businesses.

This challenge is particularly relevant in the internet service provider sector, whose operations have expanded due to the advancement of connectivity in the country. Data from the Fundação Sistema Estadual de Análise de Dados (SEADE) (2024) reveal that the number of households with internet access in the state of São Paulo increased from 76% in 2019 to 88% in 2023. This growth is even more significant in peripheral regions, where local internet providers serve populations historically underserved by major operators. Furthermore, the internet provider market is undergoing a consolidation process, with mergers and acquisitions intensifying competitiveness (Lins, 2024).

In this context, the need arises to use a strategic management tool that seeks, in a lawful manner, to reduce a company’s tax burden, known as tax planning. Tax planning has proven to be an essential mechanism for companies, regardless of their size or sector. It is conceptualized as a technical activity of business management that aims to project a company’s economic activities and recognize lawful ways to reduce, nullify, or defer the tax burden (Borges, 2021). In addition to fiscal optimization, tax planning also seeks risk optimization, operational optimization, and financial optimization, ensuring a comprehensive vision and the success of the strategy (Borges, 2021).

It is fundamental to differentiate tax planning from tax evasion and fiscal evasion. Tax avoidance is a lawful practice of tax economy, which aims at the reduction of the taxable event or tax burden through strategic and preventive planning, without generating sanctions for the taxpayer (Bazzi, 2014; Lolatto, 2020). In contrast, tax evasion is a fraudulent and unlawful practice, characterized by criminal acts such as tax evasion and fraud, in disagreement with the legislation (Lolatto, 2020). Tax planning, when applied lawfully and in accordance with the legislation, contributes to the company’s preparation for new cycles of growth and transformation.

The company object of this study, a small internet provider located in a peripheral area of São Paulo, exemplifies the relevance of tax planning. In the last five years, the company has accompanied the sector’s expansion, including through the acquisition of part of the client portfolio of a local competitor in 2024, which resulted in significant growth in its revenue. Enrolled in the Simples Nacional, the company found itself facing the imminent risk of exceeding the revenue limits of this regime, which would lead to compulsory de-registration or the need to pay the Tax on the Circulation of Goods and Services (ICMS) separately, increasing its operational and bureaucratic complexity. Faced with this scenario, the company opted to migrate to the Lucro Real regime as a way to avoid exceeding the Simples Nacional revenue limit in the next calendar year and reduce the tax burdens related to its growth.

The accomplishment of this work is justified, from a practical point of view, by offering the studied company and others with a similar profile information for strategic decision-making. From an academic point of view, it contributes to the literature on tax planning by presenting a real case study for the internet service provider sector. The objective of this work is to analyze whether the transition from the Simples Nacional tax regime to the Lucro Real represents an advantageous alternative for an internet service provider located in the municipality of São Paulo, considering the reduction of tax burdens.

2. Material and Methods

The research was characterized as exploratory and descriptive, seeking to deepen the understanding of tax planning in the context of the studied company (Bigaton et al., 2024; Gil, 2023). A single case study strategy was adopted, of an intrinsic and instrumental nature. The intrinsic nature allowed for the understanding of the unique characteristics of the investigated organization, while the instrumental dimension enabled the use of the findings to understand the effects of tax planning in other similar contexts.

The unit of analysis was a Small Business Enterprise (EPP) in the internet provider sector, located in a peripheral area of the municipality of São Paulo. This company, which offers fiber optic connection, has experienced significant revenue growth in the last five years, which led it to consider the transition of its tax regime.

The study period for tax simulation and comparison covered the calendar year 2024, from January 1st to December 31st. This interval was selected to analyze the company’s preparation for the regime migration. For contextualization of the growth trajectory, revenue and tax burden data from the company for the last five years (2020 to 2024) were used.

The data collection began with a literature review, conducted using keywords on digital platforms such as Google Scholar and the Pecege Library. The objective was to build a solid theoretical base and deepen the understanding of tax planning concepts (Marconi and Lakatos, 2002).

Complementarily, documentary research was carried out, using internal sources provided by the company and its accounting (Gil, 2023). Reports on income and expenses, revenue calculation, tax statements, Income Statements (DRE), expenses, and trial balances were consulted. These documents supported the fiscal and financial analysis.

For the documentary data collection, the signature of the Free and Informed Consent Term (TCLE) was obtained from the company’s representative and accountant. Ethical procedures followed the principles of the Privacy Policy and the General Data Protection Law (LGPD), ensuring data anonymization and non-identification of the studied organization, in accordance with CONEP/CNS/MS resolutions (466/2012 and 510/2016).

The analysis of the collected data employed a mixed approach, combining quantitative and qualitative methods (Bigaton et al., 2024). On the quantitative side, comparative analyses of numerical data were performed, examining tax aliquots, collected tax volume, and the company’s gross revenue. These data were organized for comparison between Simples Nacional and Lucro Real. The qualitative analysis focused on non-quantifiable data, seeking in-depth understanding from the bibliographic foundation and other sources, evaluating regime migration as a strategic decision.

To meet the study’s objective, a tax burden simulation was carried out for the calendar year 2024. The company’s tax calculation under the Simples Nacional regime, under which it was classified, was compared with a projection of how the taxation would be for the same period if it were under Lucro Real. This procedure allowed for the confrontation of scenarios.

In the simulation of Real Profit, specific premises were considered for the calculation of taxes. The calculation of Corporate Income Tax (IRPJ) and Social Contribution on Net Income (CSLL) was projected in the annual modality, according to the company’s option. For PIS and COFINS, it was assumed that costs and expenses corresponded to 80% of revenue, of which 60% would generate credits.

For the calculation of the Tax on Circulation of Goods and Services (ICMS), it was considered that the purchase of goods would not generate credits to be taken. These premises were established for the projection of the tax scenario under the Real Profit regime, allowing comparison with the Simples Nacional.

3. Results and Discussion

The company’s rapid growth scenario, driven by the acquisition of part of a competitor’s client portfolio in 2024, required a profound reassessment of its tax structure. The need for fiscal adjustment became pressing, leading to the proposal to transition from the Simples Nacional regime to Actual profit. This change, although it did not translate into an immediate reduction in the tax burden, represented a strategic measure of preventive planning, aiming to optimize financial management and prepare the organization for future challenges and opportunities in the dynamic internet service provider market.

Tax Planning

Tax planning, as addressed in this study, is an essential tool that should be applied preventively, preceding the taxable event with the objective of minimizing the tax burden. In the context of the analyzed company, the taxable event corresponds to the provision of internet provider services. The development of tax planning for the year 2025, before the occurrence of taxable events, demonstrates a proactive approach. This practice is fundamental for management, as it allows for the establishment of clear institutional goals and guidelines, in addition to ensuring the monitoring of amounts due and the availability of financial resources for legal obligations, avoiding surcharges and penalties (Bazzi, 2014; Lolatto, 2020).

The manager’s ability to structure the business in order to obtain tax savings, acting preventively to eliminate or postpone tax obligations, is a pillar of effective tax planning (Lolatto, 2020). In the case in question, the decision to migrate tax systems, even without an immediate tax advantage, reflects this freedom and power of action. Planning goes beyond simple tax optimization, also encompassing risk optimization, operational optimization, and financial optimization, crucial elements for the success of business strategy in an environment of constant change and sectoral growth.

Tax Avoidance and Tax Evasion

The distinction between tax avoidance and tax evasion is crucial for understanding the nature of the tax planning implemented by the company. Tax avoidance is a lawful and strategic practice that seeks to reduce the taxable event or tax burden through preventive planning, without incurring sanctions. It is an act authorized by legislation, carried out by the tax manager with the expectation of a lower tax impact (Bazzi, 2014; Lolatto, 2020). In contrast, tax evasion constitutes a fraudulent and unlawful practice, characterized by criminal acts such as evasion, fraud, and omission of information, in disagreement with Law 8137/1990.

The approach adopted by the company in this study aligns fully with the concept of tax avoidance, as the transition of the tax system was planned lawfully and in compliance with current legislation. This is not a search for illegal subterfuges, but rather a strategic restructuring to optimize tax management and adapt to growth. Rocha (2020) emphasizes the importance of focusing on the concrete application plan, that is, on real situations and their applications, which was the core of the analysis for the internet provider, ensuring that tax planning was effective and legally sustainable.

Contextual and Tax Analysis

The internet access provider market in Brazil has shown remarkable expansion in recent years, contributing significantly to the country’s connectivity (Lins, 2024). A consolidation movement was observed in the sector, with the participation of medium-sized companies growing from 13% in 2020 to 17% in 2022, while that of micro-enterprises decreased from 56% to 46% in the same period. This trend is corroborated by the analysis of the distribution of companies by the number of municipalities they operate in: in 2020, 47% operated in only one municipality, and 42% in two to five. In 2022, the proportion of companies in a single municipality fell to 40%, while that of companies operating in six to ten municipalities increased from 7% to 9%. This data indicates a growing concentration and professionalization of the sector, with fewer isolated companies and more large-scale organizations (Lins, 2024).

This market dynamic, characterized by greater competitiveness and the need for high-quality services, requires companies to be constantly updated, both technologically and managerially. The internalization of internet providers has expanded connectivity to various regions of the country, but the sector’s consolidation suggests that, in the future, providers offering greater quality and professionalism will stand out. In this context, the company studied, a small-sized provider in São Paulo, has accompanied this expansion, including through the acquisition of a client portfolio from a competitor in 2024, which boosted its revenue and the need for more robust tax planning.

Additionally, the Brazilian tax scenario is undergoing transformation with Constitutional Amendment No. 132/2023, which instituted the Consumption Tax Reform. This reform foresees the gradual replacement of ICMS and ISS with the Tax on Goods and Services (IBS), and of PIS and COFINS with the Contribution on Goods and Services (CBS), with a planned transition to begin in 2026 and conclude in 2033. For the internet provider sector, which combines communication and service provision taxation, this change will significantly alter the calculation logic. Therefore, the decision on the current tax system cannot disregard the future transition environment, reinforcing tax planning as an adaptation tool rather than just a response to the present scenario.

The analysis of the company’s billing and tax burden data over the last five years (2020 to 2024) revealed a growth trajectory with some variations. In 2020, gross revenue was R$ 2,593,902.55, with a tax burden of R$ 343,216.26, representing 13.23% of revenue. In 2021, there was a 21% drop in billing, to R$ 2,152,198.61, and a 29% reduction in the tax burden, to R$ 266,063.48, resulting in 12.36% of revenue. This decrease was attributed to the COVID-19 pandemic, which impacted indebtedness in Brazil (ANATEL, 2020).

Starting in 2022, the company showed recovery, with a 7% increase in total sales, reaching R$ 2,303,213.52, and a 9% growth in tax burden, totaling R$ 292,464.04, corresponding to 12.70% of revenue. In 2023, total sales grew by 10%, reaching R$ 2,561,096.40, with the tax burden increasing by 3% to R$ 300,669.45, or 11.74% of revenue. The year 2024 recorded the highest growth, with a 37% increase in total sales, reaching R$ 4,084,577.54, and a 45% increase in tax burden, which amounted to R$ 543,418.88, representing 13.30% of revenue. This significant growth in 2024 was the result of acquiring part of a local competitor’s provider network.

The company’s tax burden, classified under Simples Nacional, did not remain constant over the years, varying according to the accumulated gross revenue of the previous twelve months (RBT12), as per Complementary Law No. 123/2006. For the calculation of the monthly effective tax rate, the formula (RBT12 x Nominal Rate – Deduction Amount) / RBT12 is used, where the nominal rates in Annex III for leasing of movable goods and service provision range from 6% to 33%, with corresponding deduction amounts. The tax distribution percentages, such as IRPJ, CSLL, COFINS, PIS/Pasep, CPP, and ISS, also vary by revenue bracket, influencing the final effective tax rate. The company’s average annual tax rate varied from 13.67% in 2020 to 16.85% in 2024, reflecting the revenue dynamics and the progressive nature of the regime.

In contrast to the Simples Nacional, the Lucro Real regime calculates the Corporate Tax/ Income Tax On Legal Person (IRPJ) and the Social Contribution on Net Income (CSLL) based on adjusted accounting profit, which can be done quarterly or annually. The company opted for annual calculation for the next fiscal year. In addition to IRPJ and CSLL, the Tax on Operations Related to the Circulation of Goods and on the Provision of Interstate and Intermunicipal Transport and Communication Services (ICMS), the Contribution for the Financing of Social Security (COFINS), and the Social Integration Program (PIS) are calculated monthly. The rates for these taxes are fixed: 18% for ICMS, 1.65% for PIS, 7.60% for COFINS, 15% for IRPJ, and 9% for CSLL, applied to gross revenue or net profit, depending on the periodicity.

The comparative simulation of the tax burden for the calendar year 2024, considering gross revenue of R$ 4,084,577.54, revealed that migrating from Simples Nacional to Lucro Real would not result in tax savings. Under Simples Nacional, the total taxes collected were R$ 543,418.88, corresponding to an effective tax burden of 13.30% on gross revenue. In contrast, the simulation under the Lucro Real regime indicated a total of R$ 886,353.33 in taxes, representing 21.70% of gross revenue. This difference of R$ 342,934.45 signifies an increase of 63.11% in the tax burden, or 8.40 percentage points more on gross revenue, had the company operated under Lucro Real in 2024.

The main factor for this significant difference lies in the incidence of ICMS at a rate of 18% on the total gross revenue in the simulation of Actual profit, without the use of credits. Furthermore, the simulation resulted in a tax loss for Actual profit, which eliminated the incidence of Corporate Tax/ Income Tax On Legal Person and Social Contribution on Net Income. It is important to note that the simulation did not include the Social Security Contribution of the Employer (CPP), which in Simples Nacional is embedded in the effective rate, but in Actual profit is calculated separately on the payroll. The inclusion of CPP would further widen the difference, reinforcing that there would be no tax savings with the migration.

Another limitation of the simulation was the premise that merchandise purchases would not generate ICMS credits. However, as ICMS is a non-cumulative tax, the acquisition of inputs and equipment directly applied to the provision of connection services could generate a right to credit. If these credits were calculated and utilized, the simulated tax burden in the Real Profit regime could be lower than presented, reducing the difference in relation to the Simples Nacional. Nevertheless, the absence of this data in the analyzed period prevented its inclusion in the simulation.

Although the simulation indicated that Actual profit would not bring immediate tax savings, the analysis transcends a mere numerical comparison. The company achieved a turnover of R$ 4,084,577.54 in 2024, exceeding the Simples Nacional sub-limit of R$ 3,600,000.00, although it did not surpass the maximum limit of R$ 4,800,000.00. This fact implies that, in the next calendar year, even if remaining in the Simples Nacional, the company would be subject to the collection of ICMS outside the Simples Nacional Collection Document (DAS), which would result in a significant increase in its tax burden and greater operational and bureaucratic complexity.

Furthermore, the company’s growth trajectory, evidenced by the increase in revenue, suggests that the maximum limit of R$ 4,800,000.00 may be exceeded in the next calendar year. This hypothesis would lead to a compulsory disqualification from the Simples Nacional, requiring an adaptation to a normal tax calculation regime in the middle of the fiscal year, without the necessary prior planning for an organized transition. In this context, the decision to migrate to Actual profit, even without an immediate tax advantage, is configured as a preventive tax planning measure, essential for predictability, fiscal control, and the company’s preparation for new expansion cycles.

The findings of this research corroborate the theoretical foundation that effective tax planning is not limited to reducing the tax burden, but encompasses a preventive nature, anticipating the taxable event to ensure greater control over future obligations (Lolatto, 2020; Rocha, 2020). The decision to evaluate migration before it becomes mandatory characterizes a practice of tax avoidance, a lawful and strategic act that allows the taxpayer to structure their business in the most convenient way (Bazzi, 2014; Lolatto, 2020). This confirms Borges’ (2021) understanding that tax planning goes beyond tax optimization, encompassing risk optimization and operational optimization, preparing the company for an organized rather than mandatory transition.

In summary, the analysis of the transition from the Simples Nacional tax system to the Lucro Real for the internet provider in São Paulo revealed that, although the simulation for the year 2024 did not indicate a direct reduction in the tax burden, the decision represents a strategic measure of preventive tax planning. The company, given the growth of its revenue and the imminence of exceeding the limits of the Simples Nacional, opted for an organized transition, aiming for greater predictability and fiscal control. This approach aligns with the need to adapt to a consolidating market and a constantly changing regulatory environment, preparing the organization for future challenges and ensuring its long-term sustainability.

4. Conclusion

The present study aimed to analyze whether the transition from the Simples Nacional tax regime to the Lucro Real would represent an advantageous alternative for an internet provider in São Paulo, considering the reduction of tax burdens. It was verified, through simulation for the calendar year 2024, that the migration did not generate a direct reduction in the tax burden. On the contrary, the simulated tax burden under Lucro Real was 63.11% higher than that of Simples Nacional, mainly due to the incidence of ICMS at a rate of 18% on gross revenue, without the use of credits. However, this decision was configured as a preventive tax planning measure, essential for the company’s fiscal management. It was identified that the 2024 revenue exceeded the Simples Nacional sub-limit, which would imply the collection of ICMS outside the unified regime in the next fiscal year, increasing operational and bureaucratic complexity. Furthermore, the company’s growth trajectory indicated the risk of compulsory exclusion from Simples Nacional, should the maximum revenue limit be exceeded, requiring an unplanned adaptation to a normal calculation regime. Thus, the strategic transition prepares the organization for new cycles of growth and transformation, in a consolidating market and in the face of the ongoing Tax Reform, ensuring greater predictability and fiscal control.

The main contribution of this work lies in demonstrating that tax planning transcends mere fiscal optimization, encompassing risk optimization and operational optimization, as evidenced by the anticipation of the de-qualification scenario and the company’s preparation for an organized transition. From a practical point of view, the study offers valuable insights for the strategic decision-making of the analyzed company and others with a similar profile in the internet service provider sector. As limitations, the absence of data for the Social Security Contribution by Employer in the simulation of Real Profit and the impossibility of precisely calculating ICMS credits were highlighted. For future studies, it is suggested to refine these points and monitor the company in the subsequent fiscal years after the migration, in order to verify the confirmation of the strategic benefits identified over time.

Bibliographic References

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Article originating from the Course Conclusion Work of the Specialization in Tax Management of the MBA USP/Esalq

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