See how the MEI declares income in the Income Tax

In addition to the obligations relating to legal entities, some MEIs (Individual Microentrepreneurs) also need to file the Individual Income Tax Declaration (DIRPF) by May 31.

If it fits into one of the cases that require the submission of the IR statement, the MEI must be attentive to the calculation of the income it obtained in 2021 with the legal entity. It is necessary to discount the costs for the operation of the company and observe the limit of exempt profits to which each activity is entitled.

See below for guidance from Adriana Alcazar, partner at Seteco Consultoria Contábil, and Elaine Duarte, analyst at IOB consultancy.

IS THE SN-SIMEI DECLARATION VALID AS INDIVIDUAL INCOME TAX?

WHEN DOES MEI NEED TO DECLARE INCOME TAX AS INDIVIDUALS?

• As in the case of other taxpayers, the submission of the Individual Income Tax return is mandatory if the MEI has taxable income greater than BRL 28,559.70 in 2021, which is equivalent to BRL 2,379.97 per month.
• If the MEI or any of its dependents received emergency aid in 2021, the limit drops to BRL 22,847.76, the equivalent of BRL 1,903.98 per month.

Other cases that oblige the individual to declare the IR in 2022 are:

• Who received exempt, non-taxable or taxed exclusively at source income above R$ 40 thousand in 2021, which includes the FGTS (Fundo de Garantia do Tempo de Serviço) and unemployment insurance, for example
• Who had, on 12/31/2021, assets and rights of more than BRL 300 thousand
• The taxpayer who carried out an operation on the Stock Exchange in 2021
• Who moved to Brazil and was here on 12/31/2021
• The taxpayer who opted for the IR exemption on capital gain (profit) on the sale of residential property whose value was applied to the purchase of another property in the country, within a period of up to 180 days from the sale
• Who had gross income from rural activities of more than BRL 142,798.50 or wants to compensate for losses in this area

HOW TO CALCULATE THE INCOME THAT CAME FROM MEI?

• The MEI needs to identify the so-called evidenced profit.
• The first step is to check the annual revenue (everything that was generated in 2021 from revenue) and deduct the expenses you had with the legal entity (water, electricity, telephone, purchase of goods, rent, internet, etc).

HOW DO I CALCULATE HOW MUCH I SHOULD PAY IN MEI INCOME TAX?

1st step: Calculate the displayed result. It is necessary to add up the gross revenue of the previous year and deduct all the expenses of the legal entity.

2nd step: Check the value of the exempt installment. MEI is entitled to receive part of the amounts without paying Income Tax. Note that the calculation is based on the amount of gross revenue, not on the evidenced profit.

The exemption limit depends on the company’s activity:

• 8% of gross revenue for commerce, industry and cargo transportation;
• 16% of gross revenue for passenger transport;
• 32% of gross revenue for services in general

Fill in the amount of the exempt portion in “Exempt and Non-Taxable Income” under the code “09 – Profits and dividends received”. Inform the CNPJ and MEI name in their respective fields.

3rd step: The taxable amount will be the evidenced profit minus the exempt portion. Fill in this amount on the form referring to the taxable income received by PJ.

The Income Tax generator program will make the calculations according to the information. The higher the taxable profit, the higher the tax payable on the income tax return.

Heads up: If the MEI has other sources of income, it must also inform the same statement, considering that the IRPF is delivered by CPF.

HOW DO I DECLARE IN THE INCOME TAX OF THE INDIVIDUAL THAT I HAVE MEI?

• The declaration of MEI’s existence must be informed in the form “Assets and Rights” under group “03 – Equity Participations”, code “02 – Shares or shares of capital”.
• Put the CNPJ in the respective field. In the discrimination field, it is recommended to place the information that it is a MEI and the date of incorporation of the legal entity. At the end, inform the value of the share capital.

DO I NEED TO DECLARE THE MEI BANK ACCOUNT?

• The bank account of the legal entity must not be informed in the declaration of the individual. Only the bank account that has a balance greater than BRL 140 on December 31, 2021 that is linked to your CPF must be declared.