International Tax Newsletter - April 2026

Operational rules of the Brazilian Tax Reform

On April 30th, Decree No. 12.955/26 was published, regulating the CBS (Goods and Service Contribution), under the jurisdiction of the Union, established by Complementary Law No. 214/2025. The decree also includes common rules for the CBS and the IBS (Goods and Services Tax), aiming to preserve the logic of uniformity between the two taxes that make up the new dual VAT model. 

On the same date, the IBS Management Committee published CGIBS Resolution No. 6/26, which regulates the IBS, a tax with shared jurisdiction between States, the Federal District, and Municipalities. The regulatory framework confirms that the new taxes will have convergent rules in several areas, although each will maintain its own competencies and specific characteristics.

The regulations detail relevant practical aspects for companies and taxpayers, such as situations of incidence, non-incidence, the moment the taxable event occurs, location of the operation, calculation basis, specific regimes, credit treatment, ancillary obligations, and transition rules.

Interest on Net Equity (JCP) - tax treatment in operations between Brazil and the Netherlands

Published on April 27, Declaratory Act No. 5/26 provides for the tax treatment to be granted to Interest on Equity within the scope of the Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, concluded between the Federative Republic of Brazil and the Kingdom of the Netherlands. With this, Article 11 of the treaty applies, which limits the WHT rate to 15% on these payments.

The rationale for the act explicitly mentions Article 25 of the treaty (Mutual Agreement Procedure – MAP), indicating that the interpretation arises from an agreement between the tax authorities of the two countries, and not from a unilateral position of the Federal Revenue Service. This mention reinforces the legal certainty of the classification but does not eliminate the economic impact for structures that previously benefited from the exemption of dividends abroad.

Despite the treaty limiting Brazilian WHT, there is a higher probability of taxation in the European country, resulting in a higher total tax cost for the investor from the Netherlands. 

Clarification on the treatment of American LLCs in Brazil

A recent ruling brought an important clarification regarding the treatment of American LLCs under Brazilian tax law. The central question was whether a U.S. LLC whose profits flow through and are taxed directly at the partner level could escape classification as a privileged tax regime under Brazilian rules. The inquiry came from a Brazilian-resident individual holding an interest in a U.S. LLC treated as a pass-through entity, who argued that partner-level taxation should preclude such a classification. 

Brazil's Federal Revenue Office (RFB) disagreed. In its view, U.S. LLCs with non-resident partners that benefit from pass-through treatment in the United States fall squarely within the definition of a privileged tax regime, as set out in Article 2, VII of IN RFB No. 1.037/2010, irrespective of how profits are ultimately taxed at the partner level. 

Under Law 14.754/2023, investments held by Brazilian tax residents through entities deemed to operate under privileged tax regimes trigger specific obligations, including treatment as controlled foreign entities under Article 5 and the requirement to calculate profits in accordance with Brazilian accounting standards. 

The ruling is particularly relevant for cross-border structures commonly used in business internationalization. While the specific impact will vary depending on each structure's particulars, the decision is a clear signal that existing international arrangements should be carefully reviewed, and any potential adverse tax consequences assessed without delay

Exceptions for the registration of Import Declaration (DI)

Published on April 28, Siscomex Import News No. 033/26 authorizes the registration of Import Declaration (DI), on an exceptional basis, in the following situations:

Dispatch for consumption of goods admitted under the customs warehouse regime through Duimp (Single Import Declaration), with legal support from Drawback Exemption; or
Transfer to the Drawback Suspension regime, in cases where admission under the previous regime occurred through Duimp.

The registration of Duimp is still not available for these cases, awaiting the development and implementation of the corresponding functionalities in the system.

Change in the method of calculating indirect taxes

On April 1st, the General Coordination of Customs Administration informed, through Siscomex Import News No. 025/26, that due to the issuance of Complementary Law No. 224/2025 and RFB Normative Instruction No. 2.305/2026, there was a change in the system for calculating PIS-Import and Cofins-Import for transactions with Duimp and DI, which are already in effect.

Method and period of declaration of the Additional Social Contribution on Net Income→
The Federal Revenue Service published on April 6th, Normative Instruction RFB No. 2.319/26, which amends IN RFB No. 2.228/24 and states that the amounts of CSLL (Social Contribution on Net Income) surcharges must be declared in the Federal Tax Debits and Credits Statement – DCTFWeb related to the sixth month following the end of the jurisdiction's Fiscal Year.

The new Normative Instruction, despite adding a new declaration flow, should be evaluated regarding the eligibility of economic groups, since groups that reach the so-called Safe Harbour will not be subject to the CSLL Surcharge to be collected. While IN 2.228 defines the minimum tax, IN 2.319 helps the Revenue Service ensure that it is effectively declared and collected.