A CNAE, National Classification of Economic Activities, is the code that defines the productive activity of a company. The choice of activity is a very important step in the process of starting a business. O CNAE code will define many of the specific legislations to be applied on it.
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The National Classification of Economic Activities was structured based on the International Standard Industrial Classification of All Economic Activities (ISIC), from United Nations Industrial Development Organization (UNIDO). It is an attempt to organize and classify the different types of economic activity in Brazil.
A CNAE is the official classification used by statistics and by federal, state and municipal bodies in Brazil. It started to be implemented in the 90s and the idea is to group companies with similar activities, so that they are treated specifically.
A clothing retail business has totally different legislation and taxation from a financial services company. How to decide on which companies a new tax law applies? Through the National Classification of Economic Activities.
The first step in defining the CNAE your company is to consult CONCLA table - National Classification Commission. In this table, you will have to compare the activities available with your primary and secondary activities, if any.
On the IBGE you can find the table for consultation and choose the classification. The best way to understand how the code CNAE works is to change the flap to structure, as pictured above.
In this tab you will see the Sections, Divisions and descriptions CNAE:
Let's say your company is an insurance company that operates with health insurance, for example. What would be the way to choose the CNAE?
- Section K - Financial, insurance and related services activities
- 65 Division - Insurance, reinsurance, supplementary pension plans and health insurance
- 655 Group - Health insurance
- Class 6550-2 - Health insurance
Therefore, the CNAE that you must inform your company is 6550-2 / 00.
Depending on your company's activity code, it will have specific laws regarding taxation. The most important thing to understand at the outset is whether it can fit into the National Simple or not.
To do this, you need to consult the Resolutions of the National Simples Steering Committee. From there, you can consult the codes prevented from operating in the simple national.