What is CNAE and what is its importance?
Do you know what CNAE is? CNAE is the acronym for “National Classification of Economic Activities”.
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It is a coding and categorization system used to classify and identify the various economic activities carried out by companies and organizations.
Today we are going to understand more about this system and its importance for us!
What is CNAE?
CNAE stands for National Classification of Economic Activities, and is a seven-digit code designed to identify the economic activities carried out by a company.
Each economic activity is designated by a specific numerical code, which helps to standardize the identification of sectors and sub-sectors of the economy.
The CNAE is an important tool for company registration and regulation purposes, as well as for statistical, tax and market research purposes.
It is a system used by several government agencies, such as the National Social Security Institute (INSS), Ministry of Labor and Employment, and others.
As the CNAE code has seven digits, they are divided into different parts, which are:
- Sections: there are 21 different sections and they are the first number of the CNAE;
- Divisions: has a total of 87 different ones and they are related to the second CNAE number;
- Groups: there are 285 groups that correspond to the third number of the CNAE;
- Classes: there are 672 types and they correspond to the fourth number and the accompanying check digit;
- Subclasses: finally there are the subclasses, with a total of 1318 types and they correspond to the last two numbers that come after the digit.
For example, for legal services, the CNAE will be 6911-7/01, while advertising consultancy services will be 7319-0/04.
A company can have several CNAEs related to its CNPJ, however, one of them must be the main one that will be used to issue its invoices.
The others will serve as support for other activities that your company has and that can eventually be used to provide services.
What is fiscal and household CNAE?
When talking about the National Classification of Economic Activities, there are two different types, the Fiscal CNAE, which is used for tax purposes, and the Household CNAE, which is used for statistical purposes.
The CNAE fiscal code is used to identify the company's main activities related to tax purposes. The Federal Revenue Service uses this code to determine the tax regime, the amount of taxes and others.
For domestic workers, the code identifies the company's main activities for data and statistics purposes, and is used mainly by IBGE, the Brazilian Institute of Geography and Statistics, with the aim of collecting relevant information.
What is the CNAE for?
This system of standardizing economic activities is used by various types of government agencies.
And the CNAE serves several purposes, such as identifying the company's economic activity, as a form of regulation and inspection.
Government agencies use the CNAE to regulate, monitor and tax companies according to the activities they carry out.
This helps ensure that companies meet their legal and tax obligations in accordance with the nature of their operations.
Furthermore, it can also be used to collect economic data, allowing the generation of reliable statistics on economic activity in the country, which is essential for market analysis, economic research and government decision-making.
Many companies also use the CNAE to define main and secondary activities, allowing strategic business planning, growth plans and many others.
Investors, entrepreneurs and financial institutions can use the CNAE to identify market opportunities, understand industry trends and assess the risks associated with specific economic activities. This is particularly useful when considering investments or loans to companies.
How important is CNAE?
In order to avoid problems related to your company, taxes and duties, it is necessary to have a CNAE that correctly describes your company's economic activities.
This is because the CNAE will be used to understand the appropriate taxation, and if your company is not classified in the correct categories, taxes paid irregularly can cause complications.
Such as fines and even legal proceedings that will have even more consequences for the company.
This code is also essential for determining a company's labor and social security obligations, including issues of social security contributions and FGTS collection.
The CNAE plays an essential role in categorizing and enforcing specific obligations, ensuring that companies fulfill their responsibilities according to the nature of their operations.
Still speaking from a labor point of view, the right code will put you in the right category, allowing the company to be linked to the correct unions, without harming the organization itself or the employees.
This is because they may be receiving incorrect remuneration, as well as benefits, working hours and other characteristics.
Where can I consult the CNAE?
And with all this, you now know the importance, purpose and necessity of the National Classification of Economic Activities, but you also need to know where it can be consulted.
It can be found on the website Internal Revenue Service, where you will also find a list of all CNAE, being able to consult them according to each category, whether section, activity, division, group, class or subclass.
The IBGE website is also another way to consult the household CNAE, following the same rule of being able to filter according to categories.
When searching, it is best to already have some idea of the economic activity you are looking for, because there are many options. Using both the IRS and IBGE websites, you will find filters that make it easier to use.
The CNAE is an essential tool that contributes to the effective organization of the economy, compliance with legal and tax obligations, the generation of reliable statistical data and informed decision-making.
Its importance is significant for everyone, affecting both the governmental and business spheres and providing the necessary basis for the efficient and regulatory functioning of the economy.
