Brazil Implements Minimum Tax on Profits of Multinational Firms, Reports Reuters

SAO PAULO (Reuters) – Late on Thursday, the Brazilian government announced an executive order that introduces a minimum tax of 15% on the profits of multinational corporations, as reported in the country’s official gazette.

Importance of the Measures

The government has been exploring new revenue sources to achieve fiscal targets, which include eliminating the fiscal deficit, without resorting to extensive spending cuts. This initiative is part of broader global efforts to counteract tax evasion.

Key Details

The executive order establishes an additional charge on Brazil’s social contribution tax on corporate income (CSLL) to ensure that the minimum taxation reaches 15%. Officials had mentioned earlier that this approach aligns Brazil with ongoing tax discussions, particularly in its role as chair of the G20, and aims to secure compliance with the fiscal goals set for 2025.

Significant Statement

The order, signed by President Luiz Inacio Lula da Silva, highlights Brazil’s efforts to conform to the Global Anti-Base Erosion Rules developed by the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting.

Additional Context

The Brazilian Finance Ministry has yet to specify the anticipated revenue from this new tax measure. A press conference on the subject is scheduled for later on Friday.

In Brazil, executive orders take effect immediately but require legislative approval within four months to remain in force.