Self-Employed Professionals Face Tax Risks When Opting for PIX

With the increase in self-employment and informal work in Brazil, Many professionals are opting to receive payments through PIX, the instant transfer platform of the Central Bank. However, This practice can cause a number of problems., especially related to the tax return and the tax implications with the Federal Revenue

Main Problems

Lack of Formal Registration: Many self-employed do not formalize their activities, which implies no registration in the National Register of Legal Persons (CNPJ). This informality makes it difficult to prove income and obtain credit., in addition to harming future retirement. Without a formal record, The self-employed are excluded from many of the opportunities and benefits offered to formal workers.

Risk of Fines and Penalties: The IRS requires that all income be declared. Receiving only by PIX without proper declaration can result in heavy fines and other penalties. According to the recipe, the amount of the fines may vary from 20% to 150% of the undeclared amount, representing a large financial burden for the self-employed

Limitation of Social Security Benefits: Lack of regular contribution to the INSS prevents the worker from having access to benefits such as retirement, sickness benefit and maternity leave. The Informality, therefore, not only jeopardizes immediate financial security, But it also jeopardizes the future pension of these professionals.

According to IBGE (Brazilian Institute of Geography and Statistics), in 2023, about 39,3 million people worked independently or informally, representing approximately 41,1% of the workforce in the country. This contingent faces significant challenges in formalising its activities and meeting tax requirements., further aggravating the financial and social situation of these persons

This is Patricia Bastazini., Specialist accountant from Bastazini Accounting, warns about the risks of this practice: Receiving payments only by PIX without making the proper declaration to the Federal Revenue is extremely risky. Many self-employed are unaware of the legal and tax implications, which may result in serious problems in the future. It is essential that these professionals seek guidance to regularise their situation and avoid complications.”

She also adds that regularization not only avoids problems with the Federal Revenue, but also opens the door to social security benefits and better credit conditions: The formalisation and correct declaration of income allows the self-employed person to have access to a range of benefits, as facilitated credit and retirement contributions. It's an investment in the safety and future of the professional himself..”

Paths to Regularization

To avoid the problems mentioned, The selfemployed must follow some basic guidelines:

Formalization as MEI (Individual Microentrepreneur): The MEI offers a simplified form of formalisation, with low cost and access to social security benefits. This method allows the selfemployed to formalize themselves quickly and with a reduced tax burden.

Keeping a Record of Income: It is essential to keep a detailed record of income received and expenses related to professional activity. This record is essential for correct tax declaration and for the financial management of the business

Seek Career Guidance: Accountants and accounting experts can provide precise guidance on how to proceed with tax returns and tax obligations. Vocational guidance can prevent mistakes and ensure that all obligations are fulfilled correctly

Regular Contribution to INSS: Guaranteeing regular contributions to the INSS is crucial to accessing social security benefits. These contributions guarantee the social protection of the self-employed

The practice of receiving only by PIX may seem like a practical solution in the short term, But the associated risks and complications can be significant.. Formalization and compliance with tax requirements not only prevent problems with the Federal Revenue, but also provide greater security and benefits to the self-employed. It is essential that these professionals seek guidance to regularise their situation and ensure a more stable and secure future., explains Patricia

In times of economic uncertainty, Formalization and proper tax management become even more important. Self-employed persons should be aware of the risks and seek ways of formalising their activities, thereby ensuring a more secure and balanced financial life