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


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 ( and Ruben Gottberg (



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