On 13 April 2023, Law No. 14.547 transposing Provisional Measure 1148/2022 into law was published in the Brazilian Official Gazette, which extends certain benefits in regard to the controlled foreign company (CFC) rules under Law 12,973/14. Under the law, Brazilian taxpayers have the ability to make an irrevocable election to consolidate CFCs’ profits and losses each calendar year, provided certain conditions are met.
In addition, a Brazilian controlling entity may deduct up to a 9% presumed credit in relation to CFCs profits included in its taxable income. However, this benefit is only available to taxpayers in the beverage, food, construction and other industries in general. The new interim measure extends the benefit through 2024.
