Is it beneficial to transition to a ‘half hybrid’ system that the Simple company near the ceiling already operates under?

For many small businesses under the Simple Nacional tax system, the hybrid regime introduced by the tax reform seems completely unfamiliar.

Entrepreneurs who rely on the DAS to manage tax payments are concerned about the new system, which will require them to pay two additional taxes on separate guides, adding complexity to their already challenging business operations.

Small businesses that generate over R$ 3.6 million annually, known as the Simple sublimit, are exceptions to this common practice.

Businesses with annual revenue exceeding this amount can remain in the simplified regime, including billings up to R $ 4.8 million. However, entrepreneurs must now separately collect ICMS and ISS taxes outside the DAS system, resulting in a hybrid approach.

Small businesses must decide by September 30 whether to remain in the traditional Simple system or switch to the hybrid regime, which holds greater significance for those generating revenue between $3.6 million and $4.8 million. The additional administrative burden, which can be daunting for smaller companies, is now a routine part of operations.

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With the reform, the IBS will be the sole tax, replacing the ICMS and the ISS. The focus is on the CBS.

Descomplica PJ is releasing a series of reports featuring specific cases to demonstrate the expenses associated with remaining in the conventional Simple regime or switching to the hybrid system. The third simulation concentrates on larger small businesses nearing the billing threshold of Simple Nacional.

Fiesp assisted in creating simulations to predict how new taxes would affect the final price of a product.

We assessed the status of a small company that produces accessories and leather shoes. The first report showed an annual revenue of R $2 million, while the second report indicated a revenue of R $360 thousand.

In the third report, we model a turnover of R $ 4 million annually for the same company.

For a product priced at R$100, the hybrid system would result in a selling price 3.8% higher compared to the traditional Simple system. On the other hand, for business customers (B2B), the actual cost would be 2.1% lower.

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The disparity in application

If your company earns less than R$ 3.6 million annually and chooses to remain in the standard Simple system, all taxes will be consolidated into a single payment. If you switch to the hybrid system, you will have to pay IBS and CBS taxes separately, while the other taxes will still be paid through DAS.

Customers who are companies can benefit from generating full IBS and CBS credits by utilizing the credits obtained from inputs purchased for their production processes.

When the billing exceeds that amount, the scenario shifts. It will become mandatory to include IBS in the billing, similar to the current requirements for ICMS and ISS.

Companies that go beyond the sublimit do not have access to the conventional “all-in-one” Simple tax regime, according to Charles Gularte, director of Contabilizei.

If the company remains in the conventional Simplified regime, CBS will be levied in addition to IRPJ, CSLL, and pension contributions.

She does not claim credit for her purchases and instead offers customers a small credit. If you choose the hybrid option, CBS takes on the responsibility of shopping credits and transfers full credit to customers, while other charges stay with the DAS.

In 2027, the IBS will remain in the testing phase with a symbolic rate of 0.1%. ICMS and ISS will be charged as usual, and the transition to the new tax will be gradual until 2033.

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The leather industry generates revenues of R$ 4 million annually.

The third scenario used the same criteria to determine the ultimate price of a fictitious product valued at R$ 100. The business specializes in producing accessories and leather footwear as classified in Annex II of the Single National.

The calculations assumed that half of the suppliers are under the traditional Simple scheme and the other half are under the general scheme (Luke Presumed, Real, or Simple Hybrid). All customers are companies under the general scheme and can fully benefit from IBS and CBS credits. The projection is for 2027, with a CBS rate of 9.21%.

The costs vary according to the sector and the size of the company, with Fiesp’s tool indicating that CBS expenses amount to 37% of revenue, in addition to the billing of R $ 4 million. Verify the calculations for each item.

The company would get R$2.09 credits from suppliers, reducing the base price to R$97.91. The CBS due on sale would be R$9.02, which the customer could recover.

In the conventional Simple system, the business would not reclaim credits from suppliers, and the CBS owed on sales would amount to R$ 3, which is the only amount the customer could recover.

The CBS value is higher in the standard Simple system compared to earlier simulations, especially for small businesses. This is because, for a revenue of R $4 million, the gross rate of Annex II is 30%, significantly higher than the rates of the other two cases at 14.7% and 7.8%. Consequently, the corresponding CBS amount within the DAS is also greater.

The Simple hybrid’s final selling price of R$ 106.92 is 3.8% higher than the Traditional Simple’s R$ 103. This small difference is due in part to the higher rate of the Traditional Simple.

The company would receive a credit of R$ 9.02 for the client in the hybrid system, resulting in a net cost of R$ 97.91, which is 2.1% lower than the R$ 100 cost in the traditional Simple system.

How about the overall system?

With a billing of R $ 4 million, the company is nearing the limit of R $ 4.8 million under the Simplified regime. This opens up the option to switch to the Presumed Profit or the Actual Profit regime.

In this situation, taxes are all gathered individually. The payroll contribution can be significant for businesses with numerous employees.

Gularte suggests that the comparison should not be limited to just IBS and CBS but should also take into account the total tax burden, credits, prices, margins, and cost structure. Monitoring the billing evolution is important as well, as exceeding the ceiling can lead to the company being excluded from the Simple tax regime.