Tax overhaul still faces regulatory gaps before rollout
With seven months remaining before Brazil’s existing federal consumption taxes are replaced by a new value-added tax system, at least 22 issues still require joint regulation by the federal tax authority and the governing committee responsible for the new state-and-municipal VAT, according to a survey by law firm Martinelli Advogados. Among the most important unresolved […]
STJ to Rule on the Exclusion of Presumed ICMS Credits from IRPJ and CSLL Tax Bases
The Superior Court of Justice (STJ) has referred Issue No. 1,416 for binding review under its repetitive appeals framework to determine whether presumed ICMS credits may continue to be excluded from the tax bases for Corporate Income Tax (IRPJ) and Social Contribution on Net Income (CSLL), both under the prior legal framework and under Law […]
LC 224/2025: Reduction of Tax Incentives and Increase in the Tax Burden
A recent Complementary Law introduces a 10% reduction across various federal tax incentives, effective as of 2026. The legislation also restricts the attractiveness of the presumed profit regime for larger companies, increases taxation on Interest on Net Equity (JCP), and imposes structural constraints on the future expansion of tax benefits, resulting in a significantly higher […]
Brazil’s Lower House Approves Income Tax Reform: Exemption up to BRL 5,000, New Tax on High Incomes
On Wednesday evening, 1 October, the House of Representatives approved the report presented by Arthur Lira on Bill No. 1087/25. The proposal exempts individuals earning up to BRL 5,000 per month from income tax and, as a compensatory measure, introduces taxation on earnings above BRL 50,000 per month or BRL 600,000 per year. The approved […]
Brazil confirms reduced withholding tax on royalties under Brazil–France treaty
On 25 March 2025, the Brazilian Federal Revenue Service issued Cosit Ruling No. 54/2025, clarifying that payments made by a Brazilian company to its French-based parent company for software licensing should be classified as royalties and subject to a 10% withholding income tax (IRRF) rate. This reduced rate applies under the Brazil–France Double Taxation Treaty, […]
Proposed Legislation Introduces New Income Tax Exemption Threshold and Impacts Investment Funds and Receivables Certificates
On 18 March 2025, the Brazilian Federal Government submitted Bill No. 1,087/2025 to the National Congress. It proposes an income tax exemption for individuals earning up to R$5,000.00 per month. Additionally, it introduces a minimum income tax (IRPFM) targeting high-income individuals, introducing a progressive rate that applies to monthly incomes above R$50,000.00, reaching up to […]