Pillar Two: Brazil Approves 15% Minimum Tax on Multinational Profits
Brazil’s President Lula has signed Law 15079/24, that was previously approved by the Federal Senate. The law creates the additional Social introducing an additional tax on Net Corporate Income (CSLL) for multinational companies operating in the country.
The measure aims to ensure a minimum effective tax rate of 15%, aligning with the OECD’s GloBE rules to combat global tax avoidance. The tax applies to multinationals with consolidated annual revenue exceeding 750 million euros (around R$ 4.78 billion).
It will remain effective for at least the next four fiscal years, starting from March 2025. The law mirrors the provisions of Provisional Measure (MP) 1262/24 and was designed to prevent "tax base erosion" caused by profit-shifting to low-tax jurisdictions.
The government expects the measure to generate R$ 3.44 billion in revenue in 2026, R$ 7.28 billion in 2027, and R$ 7.69 billion in 2028. Approximately 290 multinationals operating in Brazil will be affected, including 20 headquartered domestically. This initiative aligns with global efforts to address challenges posed by digitalization and tax competition.
Similar policies have been adopted by 37 other countries, marking a global shift toward coordinated corporate taxation standards. Payment deadlines will coincide with the fiscal year for all impacted companies.
Brazil's Tax Reform: Investment Funds Excluded from New IBS and CBS Taxes
Brazil's recent tax reform has clarified that investment funds will not be taxed under the new IBS (Tax on Goods and Services) and CBS (Contribution on Goods and Services) regimes. This decision is seen as a positive move for the financial market, preserving the competitiveness of investment funds and avoiding additional tax burdens in this segment.
The exclusion of investment funds from these taxes aims to support the stability of the financial sector and encourage continued investment in the country. However, other sectors and forms of income may face significant changes under the new tax framework, requiring careful analysis from businesses and individuals alike.
While the financial market welcomes this measure, experts stress the importance of monitoring the implementation of the broader tax reform. Adjustments in other tax obligations could still indirectly impact the investment environment, and institutions should stay vigilant to ensure compliance and optimize their fiscal strategies.
São Paulo Tax Update: GIA Form to Be Phased Out by 2026
The São Paulo State Finance Department (SEFAZ-SP) announced that the GIA (Information and Assessment Guide for ICMS) will be eliminated starting in January 2026. This measure is part of an effort to simplify tax compliance for businesses and modernize the state's fiscal system.
The GIA form, previously used for reporting and calculating the ICMS (Tax on the Circulation of Goods and Services), will be replaced by more integrated systems that leverage digital platforms and automation. This change aims to reduce bureaucracy, streamline processes, and minimize errors in tax filings.
While the elimination of the GIA is expected to ease administrative burdens for taxpayers, businesses must ensure they adapt to the new reporting requirements. SEFAZ-SP recommends that companies begin preparing now by reviewing their current processes and aligning with updated digital solutions to guarantee a smooth transition.
This initiative underscores São Paulo’s commitment to improving tax administration and aligning with broader trends in fiscal modernization across Brazil.
Federal Revenue Expands List of Tax Benefits to Be Declared in DIRBI
The Federal Revenue of Brazil has updated the rules for the Declaration of Tax Benefits (DIRBI), increasing the number of fiscal incentives and benefits that companies must report. This expansion is part of efforts to improve transparency and oversight of tax benefits granted at the federal, state, and municipal levels.
The updated list includes benefits such as ICMS (Tax on the Circulation of Goods and Services) reductions, ISS (Service Tax) exemptions, and specific federal tax credits. Companies receiving these incentives must detail their amounts and conditions in the DIRBI, ensuring greater accountability in the use of public resources.
This measure reflects the government’s goal of monitoring the effectiveness of tax benefits in promoting economic growth and social development. By requiring detailed declarations, authorities aim to evaluate whether such incentives achieve their intended purposes or need adjustments to optimize public spending.
Businesses must stay attentive to the new reporting requirements, as non-compliance with DIRBI obligations may result in penalties. The Federal Revenue encourages companies to review their fiscal benefits and seek professional guidance to ensure accurate and timely reporting.
Senate Defines IBS and CBS Percentages for Industries in the Manaus Free Trade Zone
On January 12th, the Senate approved the text regulating the tax reform, defining the percentages of presumed credit for IBS (Goods and Services Tax) and CBS (Contribution on Goods and Services) for incentivized industries in the Manaus Free Trade Zone (ZFM). The proposal, adjusted from the House of Representatives' version, will return for further review and could be voted on this week.
With this measure, ZFM companies will be able to use the presumed credit on product sales, whether to other states or within the zone itself.
IBS Defined Percentages:
CBS Credit:
