On December 30, 2024, through Law 15.079/2024, in the process of adapting Brazilian legislation to the Global Anti-Base Erosion Rules – GloBE Rules, the Federal Government established an Additional Social Contribution on Net Income.

Below is a brief summary of the main concepts and provisions of the Law:

Scope: Entities constituting a group of multinational companies that have earned annual revenues of €750,000,000 (seven hundred fifty million euros) or more in the consolidated financial statements of the final investing entity in at least two of the four fiscal years immediately preceding the analyzed year.

CSLL (Social Contribution on Net Income): If the effective tax rate of the group in a given jurisdiction is below 15%, the difference will be collected through an additional CSLL in Brazil. There is a possibility of excluding profits based on payroll and tangible assets (eligible cases may see a variation of 5.4% to 9.6%, depending on costs between 2025 and 2032, and from 5% onward in 2033). The legislation provides the formula for calculation and possible variations. There is also the possibility of excluding profits based on substance relevant to those benefiting from tax incentives, as applicable. The contribution must be paid by the last business day of the seventh month following the end of the fiscal year. Rules such as the "excess negative tax" apply to companies with losses, which must be evaluated case by case.

Judicial Disputes: The CSLL additional amount referred to in the Law will be considered unpaid if it is, directly or indirectly, subject to judicial or administrative litigation, and it cannot be used as a credit in the application of GloBE Rules by the multinational group under any circumstances, fiscal year, or jurisdiction.

OECD Models: Reference documents include the Model GloBE Rules, Commentary to the GloBE Rules, Agreed Administrative Guidances, and other rules, guidelines, procedures, and subsequent updates approved by the OECD Inclusive Framework for the coordinated implementation of effective minimum taxation.

Certain provisions of Law 12.973/2014 are revoked: For example, provisions that consider profits available to a related company in Brazil at the date of payment or credit in an account representing an obligation abroad, and those related to sub-taxation regimes.

Qualification of countries with Favorable Taxation or Privileged Fiscal Regimes: An addition to Law 9,430/96, Article 24-C, states that "The qualification of a country with a favorable taxation or a privileged fiscal regime, respectively, as provided in Articles 24 and 24-A, which results solely from non-taxation of income at a maximum rate of 17%, may be exceptionally waived for countries that significantly promote national development through substantial investments in Brazil."

Tax Incentives: Starting in 2026,  if it does not present losses to the beneficiary, tax incentives may be converted into a financial credit classified as a Qualified Refundable Tax Credit.

Penalties: If information is not submitted within the deadlines set by a normative act, or if submitted with inaccuracies, errors, or omissions, entities located in Brazil will be subject to fines of: (i) 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 R$10,000,000.00 (ten million reais), when information is not submitted or submitted late; (ii) 5% (five percent), not less than R$20,000.00 (twenty thousand reais), of the omitted, inaccurate, or incorrect amount.

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