Global minimum tax Brazil: Government proposes additional taxation

Multinational companies with a global annual turnover of more than EUR 750 million will have to pay an additional social security contribution on their net profits (CSLL) in Brazil from the 2025 tax year. Affected companies should therefore review their tax planning strategy. The consultants at Ecovis know the details of the new global minimum tax.

Provisional Measure No. 2,265 of 2024 aligns Brazilian tax rules with international standards by adopting Pillar 2 of the OECD’s Global Anti-Base Erosion (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.

With the introduction of the CSLL in Brazil, multinational companies must rethink their tax planning strategy. We can support them in this.

Mauricio Nucci, Partner Tax Law, Vaz de Almeida Advogados – Member of ECOVIS International, Sao Paulo, Brazil

The background for the additional social security contribution

This measure is 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. In addition, the Government also issued Normative Ruling RFB No. 2,228, which regulates the matter within the scope of the Brazilian tax administration and includes an additional Social Contribution on Net Profit (CSLL).

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.

How to calculate the CSLL surcharge

The calculation for the base amount for the CSLL takes into account the sum of a 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.

It should be noted that companies subject to the CSLL surcharge who fail to provide information within the defined deadlines 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.

For further information please contact:

Mauricio Nucci, Partner Tax Law, Vaz de Almeida Advogados – Member of ECOVIS International, Sao Paulo, Brazil
Email: mauricio.nucci@vazdealmeida.com

Rafael Maniero, Tax Law Attorney, Vaz de Almeida Advogados – Member of ECOVIS International, Sao Paulo, Brazil
Email: rafael.maniero@vazdealmeida.com