Brazil: Brazil issues new interpretative law on taxes covered under double tax treaties

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Brazil: Brazil issues new interpretative law on taxes covered under double tax treaties

Pereira-Alvaro
Gottberg-Ruben

Álvaro Pereira

Ruben Gottberg

According to the recently enacted Law 13.202/15, the social contribution on net income (CSLL, by its Portuguese acronym) falls under the scope of Brazilian double tax treaties (DTTs).

By way of background, the CSLL was introduced in the Brazilian legislation in 1989 as a contribution to finance social security, calculated upon the net accounting income after adjustments. Although it was formally conceived as a contribution, its calculation basis is quite similar to the one used by the Brazilian corporate income tax (IRPJ, by its Portuguese acronym).

With regard to tax treaty policy, the CSLL has been intermittently and randomly included in the DTTs signed by Brazil, resulting in different interpretations of the taxes covered by the treaties. In this regard, the Brazilian tax authorities and administrative courts have upheld different arguments to limit the application of the DTTs when the CSLL is not expressly mentioned, including: no express inclusion of the CSLL under DTTs signed after 1988; and no reference to 'contributions' in the scope of the DTTs, but rather to 'taxes'.

After a long dispute between taxpayers and tax authorities, the new Law 13.202/15 states that the scope of the DTTs should be interpreted as including CSLL. This change, which will apply retroactively, may have positive impacts mainly on Brazilian companies with outbound investments and activities. Such change is also applicable to treaties signed by Brazil in order to avoid double taxation on profits derived from international air and shipping transport.

Multinationals are encouraged to analyse how the inclusion of CSLL in the scope of DTTs will impact their specific structures.

Álvaro Pereira (alvaro.pereira@br.pwc.com) and Ruben Gottberg (ruben.gottberg@br.pwc.com)

PwC

Website: www.pwc.com.br

more across site & shared bottom lb ros

More from across our site

The EU defended its ‘sovereign right’ to impose the tax in the face of US tariff threats; in other news, the US deputy Treasury secretary resigned after just five months
Ascoria’s chief revenue officer shares her career wisdom garnered from the disparate worlds of tax technology, electric cables, radio DJing and more
Businesses no longer have a choice when it comes to tax technology transformation. Pavlo Boyko of TMF Group says the question is simply: sink or swim?
The firm is hunting for a senior TP manager in its quest to build a full-service practice in Indonesia, A&M Tax’s Jakarta head Jaap Zwaan tells ITR
With a new government in place, the evolving tax landscape presents both opportunities and challenges for taxpayers
Major economies have expressed concerns, with China arguing a US global minimum tax exemption would be a violation of the principle of fair competition – ITR understands
Senator Richard Colbeck told ITR he was concerned by the decision to let PwC Australia tender for government contracts again after a scandal-induced ban
Whether it be due to a fragmented advisory market or a rise in M&A, Italy’s frenetic hiring has not gone unnoticed by ITR’s Talent Tracker
The deal gives Azets 14 new partners and boosts its Swedish revenues to over $100 million; in other news, Svalner Atlas launched in Copenhagen
The tax technology company will be providing a free demonstration of its OTP software and offering best practice advice on whether to ‘buy or build’ on September 8
Gift this article