Global Minimum Tax via CSLL additional taxation: Multinational companies established in Brazil will need to review their respective tax planning strategies. The measure will impact multinationals with global turnover exceeding €750 million.
By Rafael Maniero,
with Mauricio Nucci.
Portuguese >
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Legale Overseas, No. 243.
On October 3rd, the Federal Government issued a Provisional Measure establishing an additional Social Contribution on Net Profits (CSLL) for multinational companies whose annual global revenue exceeds €750 million.
Provisional Measure No. 2,265 of 2024 adapts Brazilian tax rules to international standards by adopting Pillar 2 of the GloBE rules, which sets a minimum income tax rate of 15% for all jurisdictions in which business entities operate. This additional taxation will take effect from the 2025 tax year, with payments expected by the last business day of July of the following fiscal year.
This measure aligns Brazil with Organization for Economic Cooperation and Development (OECD) practices, aligning Brazilian law with «Global Anti-Base Erosion» (GloBE) rules, aimed at curbing fiscal competition among countries by imposing a minimum tax across jurisdictions. Essentially, GloBE rules discourage profit remittance to countries offering tax benefits that artificially suppress or reduce the tax incidence on profit.
Additionally, on the same day as the Provisional Measure, the Government issued Normative Ruling RFB No. 2,228, which regulates the matter within the scope of the Brazilian Tax Administration.
As a Provisional Measure, the Government’s proposal must be confirmed by Congress within 120 days from its publication. If not confirmed within the legal period (or if rejected by the Federal Legislature), the Provisional Measure will automatically lose its effect.
To calculate the amounts serving as the base for the CSLL addition, the formula will consider the sum of the company’s taxes and its adjusted income or loss attributable to the jurisdiction for the fiscal year. If the rate falls below 15%, the tax will apply to the so-called Company Excess Profits. Excess Profits are determined from the company’s net profit, adjusted by excluding amounts related to tangible investments and payroll expenses.
Lastly, if companies subject to the CSLL addition fail to provide information within the defined deadlines, they will face a fine of 0.2% of total revenue for each month of delay, up to a maximum of 10% of total revenue or BRL 10 million, plus a penalty of 5% of the omitted, inaccurate, or incorrect amount.
In light of this, multinational companies established in Brazil will need to revisit their respective tax planning strategies.
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CSLL: Social Contribution on Net Profit
GloBE: Global Anti-Base Erosion
OCDE: Organization for Economic Cooperation and Development
RFB: Federal Revenue Service of Brazil
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