Law 13,202/15, published in the official gazette on 9 December 2015, clarifies that Brazil’s tax treaties also cover the social contribution on net profits (CSLL).
Brazil’s federal corporate income tax is comprised of the following taxes:
- The corporate income tax, or IRPJ, which is levied on the taxable profits of an entity at a rate of 15%. In addition to the IRPJ, a 10% monthly surtax is imposed on taxable income exceeding BRL 20,000; and
- The CSLL, which is levied on entities subject to the IRPJ to finance the federal social security system. The general CSLL rate is 9% (a 20% rate applies to financial institutions).
The “taxes covered” article in Brazil’s tax treaties expressly includes only “Brazilian federal income tax,” without specifying or making a reference to the IRPJ or the CSLL. Notably, the protocols to Brazil’s tax treaties with Belgium, Portugal, Trinidad & Tobago and Turkey provide that these treaties also cover the CSLL.
Law 13,202/2015 establishes that, for purposes of the interpretation of Brazil’s treaties, the CSLL is a covered tax. Because the new guidance is of an “interpretative” nature (which is specifically stated in the law), it may be applied on a retroactive basis and, therefore, taxpayers should reassess their circumstances to correctly apply treaty benefits both prospectively and retroactively.
Source: http://newsletters.usdbriefs.com/2016/Tax/WTA/160122_4.html?elq=a9cd2c63943b4164bc7fbc1f3cc5dfd8&elqCampaignId=4601&elqaid=15310&elqat=1&elqTrackId=76c94ea1fff6437393be58a8935b5d24
