International Tax Newsletter - August 2025

Brazil has a valid CSLL surtax in the global minimum tax

On August 18, the Organization for Economic Cooperation and Development (OECD) updated the Central Registry of Global Minimum Tax Legislation, recognizing the Additional Social Contribution on Net Income (CSLL) as a Qualified Domestic Minimum Tax (QDMTT) and also as a QDMTT Safe Harbor. The Brazilian rule was introduced by Law No. 15,079/2024 and regulated by RFB Normative Instruction No. 2,228/2024. The recognition is provisional but already represents a milestone in Brazil's compliance with international global minimum taxation standards.

This recognition comes amid the implementation of Pillar Two rules, an OECD/G20 initiative that establishes a global minimum tax rate of 15% for large multinational groups. The goal is to reduce aggressive tax planning practices and prevent the artificial shifting of profits to low-tax jurisdictions.

By aligning with Pillar Two, Brazil strengthens its international credibility and ensures greater regulatory stability for multinational companies operating in the country. Alignment with international practices increases the country's attractiveness to foreign investment and reduces double taxation risks for multinational groups, an important factor for economic competitiveness.

The recognition of the CSLL Surcharge as a Qualified Domestic Minimum Complementary Tax (QDMTT) and Safe Harbor by the OECD represents a decisive step toward implementing Pillar Two rules in Brazil.The measure protects national revenue, ensures legal certainty for companies, and reduces compliance costs, in addition to reinforcing the country's commitment to international tax best practices.

Presumed Profit: Federal Revenue Service defines presumption percentages

The Federal Revenue Service recently published consultation solutions that clarify the presumption percentages applicable to Presumed Profit in specific activities, providing greater legal certainty for companies and accounting professionals.

Presumed Profit is a simplified tax regime that uses fixed presumption margins to calculate the IRPJ and CSLL tax bases on gross revenue. Correctly defining these percentages is essential to avoid tax assessments and ensure tax compliance.

According to Cosit Consultation Solution No. 18/2025, revenue obtained from the disposal of non-permanent equity interests by equity holding companies should be considered gross revenue and included in the IRPJ tax base determined by Presumed Profit.

In this case, the presumption rate of 32% applies. This understanding reinforces that transactions of this nature cannot be treated as isolated capital gains, but rather as part of the company's business activities.

Civil construction, construction, and electrical services activities have different rules depending on the type of contract.

• Full contract: When the contractor supplies all the materials necessary for the execution of the work, incorporating them into the project, the rate of 8% applies to gross revenue.
• Partial contract: When only part of the materials or only labor are supplied (work contract), the applicable rate is 32%.

These understandings were confirmed by Cosit Consultation Solution No. 76/2016 and Disit/SRRF Consultation Solution No. 3,008/2016.

RFB releases another CBS pilot manual with new tests available to taxpayers

The Federal Revenue Service published the second version of the pilot program manual for testing the Goods and Services Tax (CBS), focusing on the new system for assisted calculation and simulation of the CBS, Goods and Services Tax (IBS), and Selective Tax (IS). The pilot began on July 7, 2025, and will run until December 31, 2026.

The main new feature is the assisted calculation, a system that automates the calculation of the CBS, reducing the need for manual intervention and promoting greater tax compliance. Another highlight is the Tax Calculator, an open-source calculation engine that automatically applies the reform rules for CBS, IBS, and IS. It can be integrated into company systems, operating silently, without altering the user experience.

In the test environment, taxpayers will be able to simulate:

• Issuing Electronic Invoices (NF-e model 55);
• Generation of DARFs for CBS payments;
• Use of the DFe and Payment Simulator, which allows you to test operations as a supplier or acquirer;
• Operation of the Collection module, which issues fictitious DARFs (without QR Codes or barcodes);
• Automatic refund and transfer operations for excess credits;
• Complete monitoring of the calculation, with a statement of credits, debits, payments, and offsets.

Brazil Sovereign Plan launched with R$30 billion in credit for exporters

The federal government published Provisional Measure (MP) 1,309/2025, which establishes the Sovereign Brazil Plan, a set of measures aimed at supporting Brazilian companies harmed by US tariffs on exports. The MP provides for a R$30 billion credit line for exporters, adjustments to export credit insurance, an extension of tax suspensions, and government purchases of foodstuffs that could not be exported.

The text comes into effect immediately and must be voted on by the National Congress within 120 days to remain valid.

One of the main initiatives of the Sovereign Brazil Plan is the R$30 billion financing line offered by the Export Guarantee Fund (FGE). The credit will complement existing lines and be intended for individuals and legal entities exporting goods and services, including their suppliers.

Beneficiaries must maintain or increase the number of jobs. Failure to comply with this requirement may result in the loss of the interest rate benefits on the financing. The National Monetary Council will define conditions, charges, terms, and regulatory standards.

The credit's use cases include:

• Working capital for exporters;
• Acquisition of capital goods and investments to adapt production activities;
• Projects that strengthen the production chain and expand exports;
• Investments in technological innovation or adaptation of products and services for new markets.

The FGE may include credit insurance for productive investment projects in Brazil, focusing on products with medium or high technological intensity or linked to the green economy. The lines will be operated by BNDES or authorized financial institutions.

São Paulo defines new rules for controlling and refunding ICMS credits

The São Paulo State Department of Finance and Planning announced new rules for controlling the appropriation of Goods and Services Tax (ICMS) credits. The decision comes just days after Operation Ícaro, launched on August 12, investigated a bribery scheme involving retailers and tax auditors.

The new rules aim to increase the security and compliance of the ICMS credit refund and transfer process. The São Paulo state government revoked Decree No. 67.853/2023, which allowed for so-called "accelerated appropriation," and mandated that all refund requests undergo a full tax audit.

The process now includes automated data cross-referencing, enhanced traceability, and integration with future control platforms.

The Chamber of Deputies approves urgent measures to exempt income tax for those earning up to R$5,000.

The Chamber of Deputies unanimously approved the urgent request for a bill (PL) that exempts income tax (IR) for those earning up to R$5,000. The bill also provides for a partial tax reduction for those earning between R$5,000 and R$7,350.

To offset the loss of revenue from the IR exemption, the bill, already approved by the Chamber's special committee, provides for an additional progressive tax rate of up to 10% for those earning over R$600,000 per year, or R$50,000 per month.

The maximum additional tax rate of 10% will be levied on those earning R$1.2 million or more per year, or R$100,000 per month. The rapporteur also maintained the 10% tax on dividends sent abroad provided for in the Executive's original bill.

Dividends are the portion of profits that companies pay to shareholders and, since the 1990s, have been exempt from income tax. However, the parliamentarian established three exceptions to the tax on dividends: when remitted to foreign governments, provided there is reciprocity of treatment, remittances to sovereign wealth funds, and remittances to foreign entities that administer social security benefits.

The full Chamber of Deputies is expected to vote on the proposal by the end of this month. If approved, the text, which is being processed under an urgent procedure, will be sent to the Senate for review.

NFS-e: taxpayers will have to issue invoices by CPF in the tax reform without the current consolidation mechanism→
Taxpayers who qualify for a special system for collecting the Tax on Services (ISS) and issue one or a few invoices per month, consolidating all services provided during the period, will also be impacted by the changes anticipated in the tax reform. The auditor responsible for the Tax Reform systems at the Federal Revenue Service clarified that it will be necessary to issue an Electronic Service Invoice (NFS-e) for each client, allowing them to:

• Acquire the CBS and IBS credits for the service contracted;
• Make a split payment or have the purchaser collect the tax when paying for the service;
• Eligible for citizenship benefits (0.05%);
• Receive cashback if they are eligible;
• Properly distribute the IBS among various entities, whether states, municipalities, or the Federal District.

The auditor explained that all these invoices will continue to be issued in the same municipality they are issued today. Therefore, if, for example, a company issues one invoice per month in the city of São Paulo to 5,570 customers located in each municipality in Brazil, it will not need to issue an invoice in each Brazilian municipality. It will issue 5,570 NFS-e (National Financial Reporting System) in the city of São Paulo, identifying the customer in each one.

Thus, companies will have to issue invoices by CPF (Individual Taxpayer Registry), without the current consolidation mechanism into one NFS-e.

This change will have a significant impact on large service providers, especially in the technology sector. Companies will have to update their records and invest in new ERP upgrades to comply with the regulation.

CONFAZ publishes six new ICMS Agreements on tax benefits and reduction of interest and fines

The National Council for Tax Policy (CONFAZ) published new ICMS Agreements 106 to 111/2025, addressing tax benefits and reductions in interest and fines, including provisions for granting exemptions from the Tax on Circulation of Goods and Services (ICMS) on interstate transportation services for the return of goods destined for export to the United States of America.

ICMS Agreement 106/2025 – Authorizes the State of Ceará to grant an exemption from ICMS on interstate transportation services for the return of goods destined for export to the United States of America.

ICMS Agreement 107/2025 – Provides for the validation of procedures adopted in the State of Pará based on ICMS Agreement No. 143/2024, which extends and amends the provisions of ICMS Agreement No. 1/1999, regarding exempt transactions involving equipment and supplies intended for the provision of health services.

ICMS Agreement 108/2025 – Extends until December 31, 2027, the provisions of ICMS Agreement No. 214/2023, which authorizes the State of Paraíba to grant an ICMS exemption on domestic transactions and on the difference between the domestic and interstate tax rates, levied on the acquisition of goods intended for fixed assets of the Paraíba hotel chain and parks located in the "Polo Turístico Cabo Branco."

ICMS Agreement 109/2025 – Provides for the State of Paraná's accession to ICMS Agreement No. 179/2021, which authorizes the State of Santa Catarina to grant tax benefits related to the supply of electricity to a hospital that is part of the Unified Health System (SUS), as specified.

ICMS Agreement 110/2025 – Amends ICMS Agreement No. 79, of September 2, 2020, which authorizes the aforementioned federated units to waive or reduce interest, fines, and other legal surcharges upon settlement or installment of tax debts related to the ICM and ICMS, as specified.

ICMS Agreement 111/2025 – Amends ICMS Agreement No. 82/2023, which authorizes the State of Amapá to waive or reduce interest, fines, and other legal surcharges upon settlement or installment of tax debts.