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Brazil: Law 15,079 establishing the OECD Pillar Two Global Minimum Tax in Brazil (QDMTT) has been approved

02/01/2025

In summary

On 27 December 2024, Law No. 15,079 (“Law 15,079“) was approved, which establishes in Brazil the global minimum tax of Pillar Two of the Organization for Economic Cooperation and Development (OECD).

Law No. 15,079, originating from Bill of Law No. 3,817/2024 (“BL 3,817“), adapts Brazilian tax legislation to the OECD’s Global Rules against Base Erosion (“GloBE Rules“). It establishes an effective minimum tax of 15% on the profits of multinational groups, with consolidated annual revenues exceeding EUR 750 million through an additional Social Contribution on Net Income (“CSLL“).

BL 3,817/2024 was considered by the National Congress, replacing Provisional Measure 1,262/2024 (“MP 1,262“), which had the same content, resulting in its tacit revocation.

In more detail

The new rules aim to ensure that the additional CSLL qualifies as Qualified Minimum Domestic Complementary Tax (“QDMTT“) under the OECD Inclusive Framework. This guarantees Brazil priority in taxing excess profits calculated by Brazilian entities and in offsetting tax levied abroad.

Law 15,079 expressly provides that the rules related to the additional CSLL will enter into force on 1 January 2025, subject to regulation by an act of the Brazilian Federal Revenue Service.

In addition, starting in 2026, tax incentives granted under the Superintendence for the Development of the Amazon (“Sudam“) and the Superintendence for the Development of the Northeast (“Sudene“) may be converted, in whole or in part, into a financial credit classifiable as a Qualified Refundable Tax Credit (“QRTC“), including the provision for cash reimbursement in up to 48 months.

The approved text also presents important changes to Law No. 12,973, of 13 May 2014 (“Law 12,973“), which we highlight below:

  • Presumed credit of 9%: the approved text extends the presumed credit of 9% until 2029, as provided for in Article 87 of Law 12,973, which authorizes the parent company in Brazil to deduct from the actual profit a presumed credit of 9%, calculated on the positive portion of actual profit from investments in subsidiaries or affiliates abroad engaged in manufacturing activities, the manufacture of food products and the construction of buildings and infrastructure works, in addition to other industries.
  • Consolidation of results earned abroad: Law 15,079 also amends Article 78 of Law 12,973, extending until 2029, the possibility for the Brazilian parent company to submit to corporate income tax (“IRPJ“) and CSLL the results earned abroad by its foreign subsidiaries on a consolidated basis.
  • Credit for the tax paid as minimum taxation: by amending the wording of paragraph 1 of Article 87 of Law 12,973, the new law includes express reference to the possibility of using the tax as minimum taxation, paid by foreign subsidiaries, as a credit against the IRPJ and CSLL due by the Brazilian parent company in Brazil on the portion of profits earned abroad added to the actual profit. However, the amount creditable will be determined by a regulation to be issued by the Special Secretariat of the Brazilian Federal Revenue Service.

Finally, with the publication of Law 15,079, the executive branch must submit to the National Congress a legislative proposal to restructure the rules of Universal Bases Taxation (“TBU“) provided for in articles 76 to 92 of Law 12,973 during the first half of 2025, to introduce the Income Inclusion Rule (“IIR“) in accordance with the OECD’s Pillar Two guidelines, and a Controlled Foreign Corporation Rules (“CFC“) regime.

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