Brazil’s Congress has passed Bill of Law 3,817/24 on 18 December 2024, incorporating the OECD’s Global Base Erosion (GloBE) Pillar Two rules in the Brazilian tax legislation, which introduces an effective minimum taxation of 15% through an additional Social Contribution on Net Profit (CSLL).
Earlier, Brazil has enacted Provisional Measure No. 1.262 of October 3, 2024, and Normative Instruction No. 2.228 of October 3, 2024, to introduce an Additional Social Contribution to Net Profit (CSLL). This measure ensures compliance with the Qualified Domestic Minimum Top-up Tax (QDMTT) under the Pillar Two global minimum tax framework. The QDMTT was introduced as an Additional Social Contribution on Net Profit.
The Bill of Law proposes a Qualified Domestic Minimum Top-up Tax (QDMTT), however, it excluded the Income Inclusion Rules (IIR) and the Undertaxed Payments Rule (UTPR).
Brazil’s QDMTT is expected to go into effect for fiscal years starting on or after 1 January 2025. The government is yet to determine a date to enact the IIR or UTPR.
Once the President approves the bill, the legislation will become final.
