Tax

Tax Burden: Taxes for Restaurants

23 de November de 2023 por Daniel Silva

Just as important as serving customers well and having an efficient and profitable operation is keeping an eye on the tax burden your establishment needs to pay.

This way, you ensure your restaurant complies with the law, avoid any potential penalties and/or fines, and of course contribute to the country's revenue.

But after all, what are the taxes for restaurants, what taxation is applied, and what is tax burden?

Discover this and much more ahead!

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What is tax burden?

In general, tax burden is defined as the amount of taxes paid (whether by individuals or legal entities) to the government at federal, state, and municipal levels.

It's with the value of the tax burden, plus the Gross Domestic Product (GDP), that the country invests in improvements, actions, and programs aimed at helping Brazil's population and businesses.

Just as every person must bear their responsibilities to the tax authority, the same applies to restaurants.

In this case, there are a series of taxes already embedded in the inputs acquired, but others are paid by the establishment, such as taxes related to employees, location, and others.

How does taxation work for restaurants?

But in practice, how do you know what taxes a restaurant needs to pay and what its tax burden is? For that, first, it's necessary to understand the different tax systems.

They are systems of laws that regulate and indicate how taxes are calculated and collected by companies.

There are three main options: Simples Nacional (the most commonly used); Lucro Presumido; and Lucro Real.

According to the tax system adopted by your restaurant, it's necessary to pay certain taxes and their respective amounts. But in addition to these, other charges also make up the tax burden for this type of establishment, which we will list below.

Below you'll learn more about the three main systems.

Simples Nacional

This is the system that was created, as the name indicates, to simplify tax payment. It groups the main federal, state, and municipal taxes into a single payment guide, called DAS.

Simples Nacional can be used by restaurants with revenues up to R$ 4.8 million. Its rates (that is, the percentage of taxes paid for faturamento) range from 4% to 19%.

The main benefit of this system is precisely its ease and convenience, as it unifies the main taxes into a single payment.

Lucro Presumido

The Lucro Presumido system is the model in which federal taxes – Income Tax (IRPJ) and Social Contribution on Net Profit (CSLL) – are calculated based on a fixed profit margin.

This margin, which is defined by law, has a value of up to R$ 78 million per year. That is, restaurants with annual revenue up to that amount can fall under Lucro Presumido.

Lucro Real

Finally, the Lucro Real system is one in which IRPJ and CSLL are calculated based on the restaurant's actual profit. That is, the total amount the establishment actually earned is taken into account. This value is determined through accounting records.

This system is mandatory for restaurants with revenues over R$ 78 million per year or those with profitability lower than presumed.

The main advantages of Lucro Real are the possibility of offsetting any tax losses, deducting operational expenses within the system, and reducing the calculation base for PIS and COFINS.

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7 taxes for restaurants

But the tax burden of a restaurant is not based solely on the tax system it adopts. There are also other taxes that apply to products, transactions, payments, and others.

This is because a restaurant is a mixed activity (that commercializes both services and goods), it is subject to taxes related to both activities.

For this reason, knowing exactly which taxes apply to each business is an impossible task, as they can vary greatly depending on the size of your operation, area of activity, products sold, and much more.

The good news is that there are taxes that tend to be more popular, so they apply to the vast majority of establishments. Check out the seven most common ones below!

1 – Tax on Services of Any Nature (ISS);

ISS is a municipal tax for companies that provide services. The amount of this tax for restaurants is variable, as it is defined by the municipal law of each city.

2 – Tax on Circulation of Goods and Services (ICMS);

Well-known, ICMS is a state tax that is charged on all goods that have circulated in your establishment.

3 – Corporate Income Tax (IRPJ);

As the name explains, it is charged based on a company's profit – but it can be related to presumed profit or arbitrated profit.

4 – Social Contribution on Net Profit (CSLL);

Created to finance Social Security, this tax is calculated based on the restaurant's net profit. In other words: the amount calculated before the deduction of Income Tax. It applies to companies under the Real Profit regime.

5 – Social Integration Program (PIS);

These are taxes charged to finance unemployment insurance for restaurant employees and also to pay for any salary bonuses.

6 – Contribution for the Financing of Social Security (Cofins).

This is a tax that varies according to each company's revenue. Remember that under the Real Profit regime, you can reduce the COFINS calculation base. Meanwhile, under the Simples Nacional regime, it is important to note that COFINS already has its value included in the merchandise in the case of industrialized beverages.

7 – Pension, Labor, and Municipal Contributions

This is a category we created to remind you of those better-known taxes that, precisely for that reason, need to be remembered. Some examples are: the IPTU of the property where your restaurant operates and the INSS and FGTS of your employees.

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