{"id":20030,"date":"2024-10-04T12:17:28","date_gmt":"2024-10-04T15:17:28","guid":{"rendered":"https:\/\/www.fius.com.br\/?p=20030"},"modified":"2024-10-04T12:17:28","modified_gmt":"2024-10-04T15:17:28","slug":"brazil-introduces-globe-minimum-tax-rules-medida-provisoria-no-1-262","status":"publish","type":"post","link":"https:\/\/www.fius.com.br\/en\/brazil-introduces-globe-minimum-tax-rules-medida-provisoria-no-1-262\/","title":{"rendered":"BRAZIL INTRODUCES GLOBE MINIMUM TAX RULES: MEDIDA PROVIS\u00d3RIA NO. 1.262"},"content":{"rendered":"<p>On <strong>October 3, 2024<\/strong>, Brazil introduced <strong>Medida Provis\u00f3ria No. 1.262<\/strong>, aligning its tax regulations with the OECD\u2019s <strong>Global Anti-Base Erosion (GloBE) Rules<\/strong>. This is part of the <strong>Inclusive Framework on Base Erosion and Profit Shifting (BEPS)<\/strong>, which establishes a <strong>minimum effective tax rate (ETR) of 15%<\/strong> for large multinational enterprises (MNEs).<\/p>\n<p>Key Features of the Legislation:<\/p>\n<ul>\n<li><strong>Adoption of a 15% Minimum ETR<\/strong>: The legislation introduces an additional <strong>Contribui\u00e7\u00e3o Social sobre o Lucro L\u00edquido (CSLL<\/strong>) to ensure that MNEs operating in Brazil meet the <strong>15% minimum effective tax rate on global profits<\/strong>, as required by the OECD\u2019s GloBE rules.<\/li>\n<li><strong>Scope<\/strong>: The rules apply to <strong>Multinational Groups<\/strong> with entities in Brazil and with <strong>annual<\/strong> <strong>consolidated revenues of \u20ac750 million or more<\/strong>, making these groups subject to the GloBE minimum tax regulations, similar to those implemented in other G20 and OECD countries.<\/li>\n<li><strong>Calculation of the Effective Tax Rate (ETR)<\/strong>: The <strong>ETR<\/strong> is calculated as the ratio of <strong>Adjusted Covered Taxes<\/strong> (taxes paid on income and profits) to GloBE Income (global book profits), expressed as a percentage. If the <strong>ETR<\/strong> in a particular jurisdiction is <strong>below 15%, the difference will be collected through an additional CSLL in Brazil<\/strong>. The formula for calculating the Additional CSLL in Brazil is: Additional CSLL = (15% &#8211; ETR) x GloBE Income (in Brazil).<\/li>\n<\/ul>\n<p>Key Takeaways:<\/p>\n<ul>\n<li><strong>Government Initiative<\/strong>: Unusually, the Brazilian government has issued both the executive order (Provisional Measure) and specific regulations simultaneously, indicating a strong commitment to getting this approved swiftly.<\/li>\n<li><strong>Legislative Process<\/strong>: The Provisional Measure must be approved by Congress. If passed in 2024, these rules will take effect on January 1, 2025.<\/li>\n<li><strong>OECD Guidelines<\/strong>: OECD commentary and guidelines have been included as interpretation framework for the new rules.<\/li>\n<li><strong>Impact on MNEs<\/strong>: Multinational corporations (MNCs) with business in Brazil will need to reassess their Effective Tax Rate (ETR), as calculated under the new provisions.<\/li>\n<li><strong>Impact on Tax Incentives and Planning Strategies<\/strong>: Several tax incentives and planning strategies widely utilized in Brazil may be significantly affected, including:\n<ul>\n<li>SUDENE\/SUDAM incentives,<\/li>\n<li>Goodwill amortization,<\/li>\n<li>Interest on Net Equity (INE),<\/li>\n<li>R&amp;D incentives,<\/li>\n<li>New government grant tax credit mechanisms.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>Link to the Provisional Measure here: <a href=\"https:\/\/www.in.gov.br\/web\/dou\/-\/medida-provisoria-n-1.262-de-3-de-outubro-de-2024-58815820\">https:\/\/www.in.gov.br\/web\/dou\/-\/medida-provisoria-n-1.262-de-3-de-outubro-de-2024-58815820<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>On October 3, 2024, Brazil introduced Medida Provis\u00f3ria No. 1.262, aligning its tax regulations with the OECD\u2019s Global Anti-Base Erosion (GloBE) Rules. This is part of the Inclusive Framework on Base Erosion and Profit Shifting (BEPS), which establishes a minimum effective tax rate (ETR) of 15% for large multinational enterprises (MNEs). Key Features of the [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[231,232,114],"tags":[],"coauthors":[90,60],"class_list":["post-20030","post","type-post","status-publish","format-standard","hentry","category-article","category-bulletin","category-tax-advisory"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>BRAZIL INTRODUCES GLOBE MINIMUM TAX RULES: MEDIDA PROVIS\u00d3RIA NO. 1.262 - Finocchio &amp; Ustra Advogados - FIUS Advogados - Campinas \/ S\u00e3o Paulo<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.fius.com.br\/en\/brazil-introduces-globe-minimum-tax-rules-medida-provisoria-no-1-262\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"BRAZIL INTRODUCES GLOBE MINIMUM TAX RULES: MEDIDA PROVIS\u00d3RIA NO. 1.262 - Finocchio &amp; Ustra Advogados - FIUS Advogados - Campinas \/ S\u00e3o Paulo\" \/>\n<meta property=\"og:description\" content=\"On October 3, 2024, Brazil introduced Medida Provis\u00f3ria No. 1.262, aligning its tax regulations with the OECD\u2019s Global Anti-Base Erosion (GloBE) Rules. This is part of the Inclusive Framework on Base Erosion and Profit Shifting (BEPS), which establishes a minimum effective tax rate (ETR) of 15% for large multinational enterprises (MNEs). 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