Sanctioned law defines responsibility for withholding income tax on interest remitted abroad in installment purchases
Law n. 15.329/2026 was published on January 8th and amends Decree-Law n. 401/1968 to regulate responsibility for the withholding and payment of withholding income tax (IRRF) levied on interest remitted abroad in installment purchases of goods.
According to the new wording of Article 11 of the decree-law, interest amounts paid or remitted to beneficiaries abroad are subject to IRRF, including situations in which the creditor is the seller of the goods.
The text also establishes that the entity remitting the income is responsible for acting as the withholding agent for the tax, in accordance with the sole paragraph of Article 45 of the National Tax Code (Law n. 5,172/1966).
Second supplementary bill that regulates key aspects of the tax reform is sanctioned
Among the vetoes are provisions that changed the authority over administrative tax collection and provisions that would have allowed municipalities and the Federal District to establish rules for the advance payment of the Real Estate Transfer Tax (ITBI), for example.
According to the sanctioned bill, the collection, oversight, and distribution of the new tax will be handled by the IBS Management Committee (CG IBS), composed of representatives from the federal government, states, and municipalities. The IBS Management Committee will have a technical nature and national scope, headquartered in the Federal District. The body will be responsible for issuing a single regulation for the tax, coordinating revenue collection, managing administrative disputes, and automatically distributing the collected funds among the federative entities.
Governance of the Committee will be shared between states and municipalities, with a Higher Council composed of representatives from both levels of government. Decisions will require a qualified majority, an arrangement aimed at balancing regional interests and strengthening federative cooperation.
The text also establishes clear rules for inspection, collection, and administrative adjudication, in order to avoid overlapping competencies and disputes among the federative entities. The administration of the IBS will henceforth occur in a coordinated manner, with integrated systems and standardized procedures.
Brazil’s Federal Revenue Service allows full deduction of the PAT (Worker Food Program) from corporate Income Tax
The Federal Revenue Service stated that the rule limiting the deduction of the Worker Food Program (PAT) in corporate Income Tax should no longer be applied for taxation purposes. The clarification is found in COSIT n. 3, dated January 12, 2026.
According to the tax authority, based on the Ministry of Finance approved by the Office of the Attorney General of the National Treasury, the restriction created in 2021 is no longer valid. That rule allowed the deduction only for amounts paid to employees earning up to five minimum wages and also imposed a cap of one minimum wage per worker.
In practice, companies may deduct from the Corporate Income Tax (IRPJ) the full amount of the food benefit granted to employees, with no per-person limit, provided that the other rules set out in the legislation and in the PAT regulations are met.
São Paulo State ends the ICMS tax substitution regime for perfumes, personal hygiene products, and dermocosmetics
Starting on April 6th ,2026, perfume and personal hygiene sector will be excluded from the tax substitution regime; changing directly the way ICMS is calculated, price formation, inventory treatment, and the tax configuration of companies operating in this segment.
In the Tax Substitution system, ICMS is collected in advance by a single taxpayer (usually the manufacturer or the importer), who pays the tax on behalf of the entire supply chain. The subsequent links do not show ICMS on their invoices nor generate tax credits, which increases the product’s cost and affects working capital. The measure is aligned with the broader movement toward tax simplification and with the logic of the Tax Reform, reducing advance collection mechanisms and bringing ICMS closer to a more transparent and non cumulative system
SRE Ordinance n. 94/2025 was published on December 22nd, 2025.
Brazil’s Federal Revenue Service publishes act on the deduction of taxes paid abroad by controlled and affiliated companies
On January 23, 2026, the Brazilian Federal Revenue Service (RFB) issued Interpretative Declaratory Act (ADI) RFB n. 1/2026, which addresses the deduction of foreign taxes paid by directly or indirectly controlled or affiliated companies when calculating the Corporate Income Tax (IRPJ) and the Social Contribution on Net Profit (CSLL) owed by their controlling or affiliated entity in Brazil.
Under Article 2 of the new act, a tax paid abroad by a controlled (direct or indirect) or affiliated company located outside Brazil may only be deducted from the IRPJ and CSLL due by the Brazilian resident controlling or affiliated company to the extent that such taxes relate to the portion of the investment adjustment corresponding to the foreign company’s profits, as provided in Article 87 of Law n. 12,973/2014. The act expressly prohibits: (a) offsetting these foreign taxes under Article 74 of Law n. 9,430/1996, which allows taxpayers to use their own credits to settle debts related to other federal taxes administered by the RFB; and (b) deducting or offsetting them against IRPJ or CSLL owed through monthly estimated payments.
The act further establishes that the deductible amount cannot exceed the IRPJ and CSLL due by the Brazilian controlling or affiliated entity in the relevant assessment period. Any excess must be added back to net income in Part A of the e Lalur and recorded in Part B, in accordance with Normative Instruction RFB n. 1,520/2014, so that it may be monitored and potentially used in future tax periods.
Bill 5,473/2025 proposes extending the deadline for profit allocation decisions and changing the taxation of betting activities
The proposal changes the tax rules applicable to fintechs (financial technology companies) and fixed odds betting operators and also creates a tax regularization program for low income individuals. It increases the Social Contribution on Net Profit (CSLL) rate for fintechs (from the current 9% to 12% in 2026, and then to 15% in 2028), raises the government’s share of revenue from betting activities, and establishes the Low Income Individual Tax Regularization Program (Pert Baixa Renda).
Another important aspect of the bill is an exemption related to the proposed amendment to Law No. 15,270/2025, which addresses the taxation of dividends. Under the approved text, profits earned up to the 2025 calendar year will remain exempt from income tax, provided that their distribution is resolved by April 30, 2026.
