The profit method is one of four calculation regimes that may be applied by some companies for the computation of profits for Brazil’s corporate income tax. This is a simplified regime that enables a company to pay tax based on a percentage of its total revenues for each quarter.
Provisional Measure 612/2013 has recently enacted in Brazil to expand the threshold for companies to qualify for presumed profit method. This method will be effecting from January 1, 2014 through December 31 2014, if the Brazilian Congress will approve it. As per the new regulation, Brazilian resident companies whose gross revenue did not exceed BRL 72 million (approx USD 36 million) in the previous year (previously BRL 48 million (approx USD 24 million)) will be eligible for the Presumed Profit Method.
