Brazil signs OECD Multilateral Convention
The Brazilian government has formalized its accession to the Multilateral Convention on the Application of Treaty Measures Relating to Taxes to Prevent Base Erosion and Profit Shifting, also known as the Multilateral Instrument (MLI). With this initiative, Brazil joins 105 other countries that have already adhered to the MLI.
Once ratified by the National Congress, the MLI will have the potential to update 26 Agreements to Avoid Double Taxation (ADTs) to which Brazil is a signatory, ensuring that these agreements fulfill the purpose of eliminating double taxation without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance.
The MLI was developed by the OECD in 2016, based on the recommendations of the Final Report of Action 15 of the BEPS (Base Erosion and Profit Shifting) Project of the OECD and the G20. This is an optional membership instrument, created to modernize more quickly the thousands of existing ADTs (Autonomous Diagnostic Tests) worldwide.
Brazil's accession to the Organization for Economic Co-operation and Development (OECD) impacts accounting primarily through harmonization with international rules, focusing on transparency, corporate governance, and international taxation. The process aims to adapt Brazilian legislation to OECD standards, affecting various areas of accounting, especially for multinational companies. OECD membership strengthens cooperation between the tax administrations of different countries, increasing the exchange of tax information.
This demands greater rigor and transparency in companies' financial statements. The OECD promotes the fight against corruption and tax evasion, requiring Brazilian companies to strengthen their internal controls and adopt governance practices more aligned with international standards.
Chamber approves income tax exemption for those earning up to R$ 5,000.
The Brazilian Chamber of Deputies approved in early October, with 493 votes in favor and none against, the main text of Bill 1.087/2025, which provides for income tax exemption for individuals with a monthly income of up to R$ 5,000 and a discount for those earning up to R$ 7,350 per month.
The proposal, submitted by the federal government, will still have to be approved by the Senate before being signed into law by President Luiz Inácio Lula da Silva to come into effect. The reduction in income tax was a campaign promise of Lula in 2022. Sent to the Chamber in March, the text was approved by a special committee that analyzed it.
Currently, those earning up to R$ 3,036 are exempt from the tax. The project stipulates that, in 2026, people earning up to R$ 5,000 will receive a monthly discount of up to R$ 312.89, so that the tax due will be zero. Those earning between R$ 5,000.01 and R$ 7,350.00 will receive a discount of R$ 978.62.
According to the government, with the approval of the proposal, more than 26.6 million taxpayers will benefit from the exemption in 2026.To compensate for the exemption, whose cost is estimated at R$ 25.8 billion to public coffers, the project foresees the taxation of people with incomes above R$ 600,000 per year, with a progressive rate of up to 10%. The maximum rate will apply to those who receive annually from R$ 1.2 million. Furthermore, it will not be applied to those who already pay the maximum income tax rate, which is 27.5%.
Provisional Measure loses validity and alters rules of financial taxation
Declaratory Act CN No. 67/2025 ended, on October 8th, the validity period of Provisional Measure No. 1,303/2025, better known as the Financial Taxation MP, which, among other provisions, altered the rules for taxing income from financial investments and virtual assets. Accountant and tax specialist Camila Oliveira clarifies that, due to the loss of effectiveness of the aforementioned Provisional Measure No. 1,303/2025, the rate of the Social Contribution on Net Profit (CSLL) for the aforementioned institutions remains as follows:
Rate: 9%
Tax rate: 15%
Proposal establishes a minimum tax of 17.5% for financial institutions
Nubank's Vice President and Global Head of Public Policy, Roberto Campos Neto, proposed creating a minimum tax rate of 17.5% for all financial institutions. The idea applies to the effective tax rate (ETR), which measures the actual proportion of taxes paid on companies' taxable income.
Former Central Bank president Campos Neto, whose term ended in December 2024, has positioned himself amidst a debate on taxation between fintechs and the Brazilian Federation of Banks (Febraban). The discussion intensified after the Chamber of Deputies rejected the government's Provisional Measure that would have increased the Social Contribution on Net Profit (CSLL) for fintechs, bringing their rates closer to those of large banks.
The rejected Provisional Measure aimed to raise the CSLL from 9% to 15% for payment institutions and from 15% to 20% for finance companies, the same rate applied to banks. Representatives of the fintech sector claim that, in practice, they already pay more taxes than large banks. A survey by Zetta — an association representing companies in the sector, including Nubank — indicates that, in 2024, the sum of CSLL and IRPJ (Corporate Income Tax) for the main fintechs was 29.7%, compared to 12.2% for banks.
Brazilian Chamber approves emergency credit line for exporters affected by US tariffs
The Industry, Commerce and Services Committee of the Chamber of Deputies approved Bill No. 3868/25, which establishes an emergency dollar credit line to support Brazilian exporting companies impacted by import tariffs imposed by the United States on national products.
The approved text proposes the creation of the Special Dollar Credit Line for Refinancing and Rollover of Postponement on Exchange Contracts (LR-ACC). This instrument will be aimed at Brazilian companies that can prove direct losses resulting from the increase in import tariffs.
The objective is to allow the refinancing of exchange obligations, the continuity of productive and commercial operations, and the stability of Brazilian exports affected by the tariff action initiated in August 2025. To apply for the LR-ACC, companies must prove:
The operation will be carried out by federal public financial institutions, and the resources may come from budgetary allocations from the Union, the Export Guarantee Fund (FGE), or other public sources.
The proposal aims to guarantee financial liquidity for affected exporting companies, preventing contract breaches and ensuring the maintenance of jobs and competitiveness in the international market. The instrument also aims to preserve the balance of trade in Brazil, which could be affected by the reduction in external sales of products affected by US tariffs.
Bill No. 3868/25 will still be analyzed, in a conclusive manner, by the Committees on Economic Development, Finance and Taxation, and Constitution and Justice and Citizenship (CCJ). To become law, the text needs to be approved by the Chamber of Deputies and the Federal Senate.
Sectors that do not issue invoices may be excluded from the first phase of CBS
The Brazilian Federal Revenue Service is focusing its efforts on completing, by January 2026, the integration of the Contribution on Goods and Services (CBS) into the electronic tax documents currently in use. This first phase will only cover operations whose taxable events are already declared and reported to the tax authorities.
However, activities that do not yet have standardized tax documents or defined technical models, such as services, insurance, and health plans, will be excluded from the initial stage.
The information was confirmed by tax auditor Marcos Flores, manager of the project to implement the consumer tax reform at the Federal Revenue Service. According to Marcos Flores, the development of new tax documents and adjustments to existing models will take place throughout 2026.
These sectors will not be included at the start of the CBS because, although some issue invoices, they do not yet have a standardized electronic tax document integrated with the Federal Revenue Service. According to Flores, the temporary exclusion of these sectors stems from the fact that the complementary regulations and necessary technical layouts will not yet be finalized by the schedule planned for January 2026.
The Federal Revenue Service informed that the process of adapting the tax systems will continue to be developed throughout 2026, as the new electronic tax documents are completed and approved. The full integration of the CBS will depend on the finalization of the technical standards and the creation of new electronic tax document models capable of encompassing all operations of goods and services.
The expectation is that, after the initial implementation, the Federal Revenue Service will gradually expand the scope of the system, incorporating sectors currently excluded, such as financial services, health plans, and rentals.
