Brazil Federal government issued a provisional measure, published in an extra edition of the Official Gazette on Thursday, introducing an additional Social Contribution over Net Profit (CSLL) to align Brazilian tax legislation with the Global Anti-Base Erosion (GloBE) framework.
The provisional measure mandates an effective minimum taxation rate of 15% through an additional CSLL, in compliance with the GloBE framework developed by the Inclusive Framework, coordinated by the Organization for Economic Cooperation and Development (OECD) and the G20. This adjustment seeks to standardize Brazil’s tax regulations with international anti-tax avoidance practices aimed at ensuring fair profit taxation across jurisdictions.
According to the Official Gazette, the additional tax will apply to multinational enterprises with annual consolidated revenues of at least €750 million in at least two of the four preceding fiscal years. The scope aligns with OECD recommendations targeting large economic players involved in global tax planning strategies.
Government has not disclosed the estimated revenue impact expected from the imposition of this additional CSLL.
The Brazilian Federal Revenue Authority (Receita Federal) will be responsible for regulating the implementation of the CSLL additional rate, including specifications for currency conversion mechanisms and compliance procedures. These regulations are subject to periodic revision to remain aligned with reference documents approved by the OECD’s Inclusive Framework, advocating that large multinational corporations should be subject to a minimum tax rate of 15% on profits, irrespective of jurisdiction. This global taxation floor aims to mitigate profit-shifting incentives towards jurisdictions with preferential tax regimes.
In November, Tatiana Rosito, Secretary of International Affairs at the Ministry of Finance, confirmed that Brazil was advancing preparations for adopting this GloBE-based taxation model, aiming to enhance international tax transparency and cooperation.
Additionally, on Thursday, the Ministry of Finance announced an amendment to the provisional measure extending the timeframe for financial institutions to deduct losses resulting from loan default from their Corporate Income Tax (IRPJ) and Social Contribution on Net Profit (CSLL) calculation bases. This modification aims to adjust the deductibility framework for bad debts within the financial sector, ensuring alignment with broader fiscal policies governing corporate taxation.
Based on information of the website www.infomoney.com.br, Official Gazzette and VBR Brasil`s information.