Brazil Implements Minimum 15% Tax on Multinational Corporations

SAO PAULO (Reuters) – Brazil’s government published an executive order on Thursday, introducing a minimum 15% tax on the profits of multinational corporations, as shown in the official gazette.

Why It’s Important

Brazil is seeking new revenue sources to achieve fiscal targets, including reducing its fiscal deficit to zero, without implementing broad spending cuts. The government states that this initiative aligns with global efforts against tax evasion.

Details

The executive order introduces an additional levy on Brazil’s social contribution tax on corporate income (CSLL) to ensure the minimum taxation rate of 15%.

Previously, Brazilian officials indicated that this move aims to align the country with ongoing international tax discussions as it chairs the G20, ensuring compliance with the 2025 fiscal target.

Key Quote

This measure aligns with the Global Anti-Base Erosion Rules (GloBE Rules) established by the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting, as stated in the order signed by President Luiz Inacio Lula da Silva.

Additional Background

The Finance Ministry has not yet provided estimates on the expected additional tax revenue from this initiative. Government officials will hold a press conference regarding the topic later on Friday.

Executive orders in Brazil are immediately valid but need to be approved by lawmakers within four months to remain effective.