Advantageous tax regimes for solar energy resellers and installers?

In accelerated growth, competitiveness is a key element for the success of entrepreneurs in the solar segment across the country.

Solar energy resellers and installers are a driving force in the photovoltaic energy market, with sunlight as their main ally.

And to help them plan to prosper, choosing the tax regime that best suits your business is essential.

We have prepared this article that reveals how to minimize tax costs, always fully respecting the law, but looking for scenarios with less or no taxation.

The idea is to clarify points that strengthen decision-making or open eyes regarding the tax regime in which they are inserted in a sector that grows exponentially and is fundamental for the recovery of the economy and for more than 63 thousand jobs gained since 2012 .

In July, Brazil reached the 3 GW photovoltaic mark in distributed generation and added R$ 10.7 billion in new investments.

When choosing the tax regime, the following factors must be taken into account:

• Profitability;
• The activity you carry out;
• The value of the payroll;
• The billing.

The choice of tax regime also directly affects the competitiveness of companies. Assuming that a reseller is participating in a competition and the price that the competitor presents is better and you are intrigued, since they are in the same city, for example and have similar costs.

It is not surprising if the difference in value is basically a matter of tax intelligence.

There are three regimes available for the classification of legal entities in Brazil and the summary below explains each of them below and the peculiarities of resellers and solar energy installers:

Simple national

It is an facilitated and simplified tax regime for micro and small businesses that allows the payment of various federal, state and municipal taxes in a single tab.

The rate is differentiated, varying according to revenue, which is separated into revenue bands, up to annual gross revenue of R$ 4.8 million, a limit that came into force in 2018.

The option for Simples Nacional is always made in the first month of each year and the CNAEs (National Code of Economic Activity) to operate in the solar energy segment are included in this tax regime.

Depending on the annual gross revenue limit and characteristics of the solar business. This is the worst tax regime model for buying and selling goods (solar energy generators) but it is the best option for providing services in general (projects and installations), including for “sales commission” through Direct Sales.

Direct Sales is a service offered by Aldo Solar, where the solar energy generator is invoiced directly to the end consumer, be it a legal entity or individual, and the reseller who mediates the negotiation receives a sales commission after sending an invoice. correspondent for Aldo Solar.

The value for the project and installation is invoiced and received directly by the reseller. With this type of sale, the reseller is at greater risk of exceeding the annual revenue limit and would need to collect taxes relating to solar energy generators in the purchase and sale operation.

Presumed profit

It is a simplified form of taxation for determining the calculation basis of Income Tax and CSLL (Social Contribution on Net Profit) of legal entities.

The system is used to assume the profit of the legal entity based on its gross revenue and other income subject to taxation.

In general terms, this is a profit fixed based on standard percentages applied to the ROB (Gross Operating Revenue). Other potential income earned is added to this result, such as financial income and rent.

Although it is not a mandatory regime, Presumed Profit is quite widespread due to its simplicity and, mainly, for tax strategy reasons, as it can represent tax savings, especially in highly profitable companies.

In this regime, it is not permitted to take credits of 9.25% from PIS/COFINS on your purchases and the tax on your sales/revenues (solar energy generators) is 3.65% from PIS/COFINS.

Real profit

It adopts the most complete tax/accounting method and also with the most expensive accounting fees, but with great advantages, such as the reduction of taxes paid on the acquisition of raw materials and services.

When tax planning is done well, this regime contributes to the company's monetary control and even favors cost reduction.

These benefits are possible, because all the information provided to the Federal Revenue Service of Brazil is the same as that required to maintain good management.

Furthermore, the deduction of 100% from expenses, losses and losses are made before the calculation, that is, if R$ 100 was calculated for a turnover of R$ 150, the taxes will be calculated on the R$ 50, while in the Presumptive and Simple regimes, the contribution is calculated on the “gross” of the total invoiced.

When choosing Real Profit, the information provided must be detailed, with the fulfillment of several additional obligations with the allocation of costs and results. Without a doubt, this tax regime has the lowest tax burden and is the best option for buying and selling solar energy generators.

The majority of solar resellers served by Aldo Solar adopt “tax planning” that is completely appropriate to their profile: whether Real Profit, Presumed Profit or even Simples Nacional.

It is worth remembering that whatever the chosen modality, with perfect planning with the accountant, it can be considered that the company is ready to accompany the growth of a sector that uses solar energy to heat the economy, generate jobs and promote reduced energy bills for millions of Brazilians.