CSLL Surtax: Provisional Measure establishes a minimum taxation of 15% on multinational profits

On October 3, Provisional Measure 1,262/2024 was issued, introducing a surtax Social Contribution on Net Income (CSLL) as part of Brazil's efforts to align its legislation with the Global Anti-Base Erosion (GloBE) Rules, also implements other provisions. The measure, developed by the Inclusive Framework under the coordination of the Organization for Economic Cooperation and Development (OECD) and the G20.   

Large multinational groups operating in Brazil, defined as those with annual revenues of 750 million euros or more in the consolidated financial statements of their ultimate parent company for at least two of the four fiscal years immediately preceding the year under review, will be required to pay a minimum effective CSLL (Social Contribution on Net Income) tax rate of 15% starting January 1, 2025. 

A multinational group refers to an organization that has controlled or affiliated entities operating in multiple countries, each subject to distinct tax regimes. 

The calculation of the effective rate must consider all taxes levied on profits, including taxes paid in other jurisdictions, to ensure that the global minimum taxation is met.

The Brazilian Revenue Service of Brazil issued Regulatory Instruction IN RFB No. 2,228 on October 3, 2024, regulating this Provisional Measure, which adopts the GloBE Rules Model, providing detailed guidelines on how to calculate the effective minimum taxation and how to report the necessary information.

 Penalties

The constituent entities must provide all necessary information for determining the surtax CSLL. If the data is not submitted within the established deadlines or is presented with inaccuracies, errors, or omissions, the constituent entities located in Brazil will be subject to the following fines:

• 0.2% per calendar month or fraction thereof, of the total revenue for the fiscal year to which the obligation refers, limited to 10% and BRL 10 million, when the information is not submitted or is submitted late; and
• 5%, not less than BRL 20,000, of the omitted, inaccurate, or incorrect amount. 

Proceduring 

It is important to highlight that, although Provisional Measure 1,262/2024 is already in effect, it must be approved by the Chamber of Deputies and the Senate to become law. The initial effective date is 60 days (from the issuance date), which may be automatically extended for an equal period if the voting process is not concluded in both houses of the Congress.

Tax Support

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