MEI – Individual Micro-Entrepreneur

Individual entrepreneurs with gross revenues that does not exceed BRL 81,000.00 per year can register their business as Individual Micro-Entrepreneur (MEI), Microempreendedor Individual in Portuguese. This allows entrepreneur to establish a company and create a Brazilian Tax ID number. In order to register as a MEI, the entrepreneur must meet these conditions:

• Gross Annual revenue does not exceed BRL 81,000.00;
• Cannot be a partner, administrator or owner of another business;
• Cannot have more than one employee;
• The type of business must be listed in MEI table.

MEI law allows craftsmen, tailors, hairdressers, electricians, photographers, painters, carpenters, plumbers, and several other professionals to formalize as a MEI, obtain a Tax ID number and pension coverage. The MEI can also do business with government entities, issue local tax invoices (Nota Fiscal) and request bank loans.

Taxes

The big advantage of MEI is the tax requirements. Different from other entities, the MEI does not need to pay several taxes to different tax authorities and file several tax forms. The MEI is not required to pay Income Tax, but is required to pay the following taxes on a monthly basis:

• Social Security: 5% of minimum salary.
• ISS: BRL 5.00 for service businesses.
• ICMS: BRL 1,00 for goods and manufacturing businesses.

Tax Payment

The payment is made electronically on a single tax form named DAS. The MEI must annually file the DASN, short for Declaração Anual de Faturamento do Simples Nacional in Portuguese, and should report all revenues for the year.

For businesses that have the possibility to be registered as a MEI, there is no other solution that has such benefits as paying less tax, not filing income tax returns, no need for an accountant, no registration fees for setting up the legal entity, and several other advantages.

Thiago M. Silveira is a Brazilian Chartered Certified Accountant (CRC) with more than 10 years of success in the accounting field, with insightful understanding in all aspects of accounting, financial reports preparation, local taxes and compliance in Brazil.