BRAZIL Law and Practice Contributed by: Paulo Honório de Castro Júnior and Bruno Marques Feitosa, William Freire - Advogados Associados
4.2 Pillar One – Amount A Brazil supports Pillar One at the political level but has not implemented Amount A domestically. As a mem - ber of the Inclusive Framework, Brazil endorsed the October 2021 Statement on the Two-Pillar Solution and participates in the ongoing negotiations con - cerning the Multilateral Convention. As a large mar - ket jurisdiction, Brazil is, in principle, aligned with the policy objective of reallocating a portion of residual profits of highly profitable multinational enterprises to market jurisdictions, even in the absence of physical presence. However, no domestic legislation or administrative guidance has been enacted to implement Amount A. Its application in Brazil remains contingent upon the conclusion and ratification of the Multilateral Conven - tion. Public debate reflects a cautious approach, with attention to complexity, revenue impacts, legal cer - tainty and dispute resolution. In practice, Brazil has prioritised the implementation of Pillar Two, while maintaining a supportive but reserved position regarding the operationalisation of Amount A. 4.3 Pillar Two Brazil has implemented the global minimum tax (QDMTT) under Pillar Two through Provisional Meas - ure No 1,262/2024, subsequently converted into Law No 15,079/2024. The legislation introduces a qualified domestic minimum top-up tax aligned with the OECD Global Anti-Base Erosion (GloBE) framework. The regime applies to multinational enterprise groups with consolidated annual revenues of at least EUR750 million in at least two of the four preceding fiscal years. It is effective for fiscal years beginning on or after 1 January 2025. Brazil’s implementation focuses on the adoption of a domestic minimum top-up tax designed to ensure a 15% effective taxation threshold within its jurisdiction, in line with the Pillar Two architecture. 4.4 Specific Features or Deviations of Pillar Two Brazil’s global minimum tax, enacted by Law No 15,079/2024 (following Provisional Measure No
1,262/2024) and regulated by Normative Instruction RFB No 2,228/2024, was drafted to closely adhere to the GloBE Model Rules. The regime introduces a QDMTT applicable to multinational enterprise groups with consolidated annual revenues of at least EUR750 million. A notable structural distinction is that Brazil has not implemented the Income Inclusion Rule (IIR) or the Undertaxed Profits Rule (UTPR). The Brazilian frame - work is limited to a domestic top-up tax designed to ensure that constituent entities located in Brazil are subject to a minimum effective tax rate of 15%. In this respect, Brazil adopted a QDMTT-only approach rather than the full Pillar Two architecture. Substantively, the computational structure largely mirrors the OECD Model Rules. However, the practi - cal interpretation of several concepts requires careful alignment with Brazilian tax and accounting practices. This is particularly relevant for matters such as the characterisation of qualified refundable tax credits, the treatment of deferred taxes, currency conversion rules and the interaction with existing corporate income tax and CSLL mechanisms. Brazil’s regime is embedded in its domestic legal framework – notably through an additional CSLL charge – and therefore must be applied in light of established Brazilian fiscal concepts and administrative practices. Accordingly, while Brazil’s implementation is broadly consistent with the OECD framework at a structural level, certain interpretative and operational aspects may differ in practice due to the specific features of Brazil’s tax system. 4.5 Digital Services Tax Brazil has not implemented a standalone digital ser - vices tax (DST). Instead, the country taxes the digital economy through the adaptation of its existing con - sumption tax framework and specific sectoral levies. Currently, streaming services and software licens - ing are classified as services subject to the munici - pal service tax ( imposto sobre serviços de qualquer natureza – ISS), with rates varying between 2% and 5%. Additionally, audiovisual streaming platforms are now subject to the contribution for the development of
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