Brazil has updated its minimum tax rules for multinationals under OECD Pillar Two. In October 2025 Brazil’s Federal Revenue (Receita Federal) issued a new Normative Instruction (IN RFB 2282/2025) that incorporates the OECD’s latest Global Anti-Base Erosion (GloBE) guidance. These rules establish a 15% global minimum effective tax rate on profits for large corporate groups (those with over €750 million in annual revenue) in each jurisdiction. In practice, this means that if a Brazilian subsidiary’s effective tax rate (ETR) falls below 15%, Brazil will impose a domestic top-up tax (an extra CSLL surtax) to make up the difference. The October 2025 update refines how deferred tax, hybrids, and securitizations are handled, ensuring Brazil’s law stays aligned with Pillar Two standards.

Brazil’s revised rules take effect for fiscal years beginning in 2026 (with some provisions optionally applicable from 2025). Multinationals with Brazilian operations should start preparing now: the first QDMTT (Qualified Domestic Minimum Top-Up Tax) payments will be due in 2026 (September 2026 for FY2025 revenues). We explain below how these changes affect tax compliance, profit repatriation, transfer pricing, and corporate structuring. Key points for foreign investors and subsidiaries are highlighted, along with global context.

Pillar Two and the Global Minimum Tax

As background, the OECD/G20 Pillar Two rules set a 15% minimum tax rate on large MNEs worldwide. In October 2021 over 135 jurisdictions (now over 140) agreed to these GloBE rules as part of global tax reform. Under Pillar Two, MNEs with at least €750 million consolidated revenue must ensure that each country in which they operate taxes their income at an ETR of at least 15%. If not, the shortfall can be collected by either the home country (via an Income Inclusion Rule) or the host country (via a Domestic Minimum Top-up Tax, a QDMTT). Brazil chose the latter approach. In other words, Brazil imposes its own top-up tax on low-taxed profits, rather than relying on the parent country to do so.

This 15% minimum tax is now a global trend: the EU has enacted rules for a 15% minimum tax across member states, and countries like the UK and Singapore have implemented similar top-up taxes. For example, the UK introduced a 15% Multinational Top-up Tax (with effective dates in 2024–25), and Singapore will impose Pillar Two top-ups from 2025. In sum, Brazil’s reforms are part of a worldwide move toward “minimum effective tax” rules to curb profit shifting and protect tax bases.

Brazil’s Minimum Tax Rules (QDMTT)

Law 15,079/2024 – Introducing the QDMTT

Brazil first introduced its Pillar Two rules at the end of 2024. On December 27, 2024, Law No. 15,079/24 was enacted, creating a Qualified Domestic Minimum Top-Up Tax (QDMTT). This law makes Brazil’s large MNEs (with two of the last four years’ revenues above €750M) subject to a 15% minimum ETR on their local profits.

In concrete terms, the law applies a surtax on the Social Contribution on Net Profit (CSLL) to “top up” any shortfall: if a Brazilian subsidiary’s actual tax (IRPJ + CSLL) yields less than 15% of its GloBE income, the QDMTT covers the gap.

Law 15,079/24 aligns closely with the OECD GloBE model. It defines each Brazilian entity’s GloBE Income starting from its accounting net profit (per its financial statements) plus specific additions or subtractions specified in the law. Notably, gains or losses from marking assets to fair value (common in agriculture or finance) are included in GloBE income by default, though taxpayers may elect a five-year realization method to defer their inclusion. The law also applies a substance-based carveout: roughly 5% of a company’s payroll costs and tangible assets’ base can be excluded from GloBE income, reducing the top-up burden on businesses with real substance.

The QDMTT was set to take effect for fiscal year 2025, with payments due by September 2026. While Law 15,079/24 covers the core concept, detailed rules were fleshed out by tax authorities. On October 3, 2024 the Receita Federal issued Normative Instruction RFB No. 2,228/2024, open for consultation, to explain how to calculate GloBE income, excess profits, and the CSLL top-up.

October 2025 Update – Normative Instruction 2282/2025

On October 2, 2025, the Receita Federal issued Normative Instruction RFB No. 2,282/2025 (published 3 Oct 2025) to update and refine Brazil’s minimum tax rules. This update incorporates the OECD’s June 2024 administrative guidance into Brazil’s regime and clarifies many technical points. Notably, the update was announced as a routine “revision” to keep Brazil’s law in sync with the GloBE rules, reinforcing Brazil’s commitment to OECD standards.

Key aspects of IN 2282/2025 include:

• Adjustments to deferred taxes. New rules on tracking and recapturing deferred tax liabilities (DTLs) ensure that GloBE computations align with Brazilian tax accounting. For example, the update adds guidance on aggregating and reversing DTLs, in line with Pillar Two rules.
• Accounting/tax mismatches. It provides rules for differences between accounting values and tax bases of assets or liabilities. This ensures the GloBE calculation reflects true economic values (covering currency remeasurement, impairment, etc.).
• Cross-border tax allocation. The instruction clarifies how to allocate foreign taxes in a global blended system and details the four-step method for cross-crediting taxes among jurisdictions.
• Transparent/hybrid entities. The update defines how to treat “pass-through” (transparent) entities and hybrid entities. This prevents tax arbitrage through conduit or dual-status structures.
• Securitization vehicles. New provisions address special investment vehicles. Brazilian law now allows excluding qualifying securitization entities (used for asset financing) from the top-up tax, mirroring an OECD safe-harbor.
• Legal clarifications. The update also cleans up language on fiscal year rules, accounting standards to use (IFRS vs Brazilian GAAP), the concept of “jurisdiction,” and even removes a double taxation of interest-on-equity (IRRF on JCP) error.

Most of these changes became effective for fiscal years 2026 onwards. However, in many cases companies may opt to apply them early from 2025. In short, the Oct 2025 update fine-tuned Brazil’s regime to match international guidance, without changing the 15% rate or the basic QDMTT approach.

Impact on MNE Operations in Brazil

The new minimum tax rules have wide-ranging implications for foreign-invested companies and Brazilian subsidiaries:

• Higher effective tax burden. Companies that have benefitted from tax incentives or low-tax subsidiaries in Brazil may now face additional CSLL charges. For any jurisdictional ETR below 15%, the QDMTT kicks in. This can significantly raise the tax bill of multinational affiliates in Brazil, reducing repatriated profits or forcing structural changes.
• Compliance and reporting. Each impacted Brazilian subsidiary must calculate its GloBE income and ETR, then report the details to Receita Federal. This is beyond ordinary tax returns: firms must gather data on worldwide tax paid, tangible assets, payroll, etc. The top-up CSLL is due by the last business day of the 7th month after year-end. If a Brazilian entity fails to file the required information or files inaccurate data, steep penalties apply. For example:
  • 0.2% of annual revenue per month of delay (up to 10% total, or up to BRL 10 million) for late/missing filings.
  • 5% of the omitted/incorrect amount (minimum BRL 20,000) for errors or omissions.

In practice, this means that large MNEs must create new compliance processes – similar to Country-by-Country Reporting – to gather GloBE data each year. Many experts advise outsourcing these tasks to specialists, given the complexity.

• Accounting and tax basis differences. Brazil’s GloBE rules start from each entity’s accounting profit. These rules differ from standard Brazilian tax calculations (IRPJ/CSLL bases), so companies will need parallel accounting ledgers or adjustments. For example, Brazilian GAAP (or IFRS) net profit forms the base, then Pillar Two add-backs/exclusions are applied. Firms may need separate “Pillar Two ETR” workflows and systems. Companies should be careful to reconcile tax depreciation, impairment, currency revaluations and other differences.
• Transfer pricing alignment. Brazil already aligned its transfer pricing rules with OECD guidelines as of 2024. Under Pillar Two, consistent transfer pricing treatment helps stabilize ETR calculations. MNEs should ensure their Brazilian and intra-group transfer pricing policies do not conflict with the GloBE income allocations. For instance, if a Brazilian subsidiary pays an affiliate, how that payment is taxed (and attributed) can affect the Brazilian ETR.
• Profit repatriation and dividends. Although outside Pillar Two per se, related tax reforms now affect repatriation. In late 2025 Congress approved a bill imposing a 10% withholding tax on dividends to foreign shareholders. (Previously, dividends were largely exempt.) To mitigate the extra burden, Brazil will grant a tax credit so that the combination of corporate tax paid plus the 10% WHT does not exceed the normal 34% maximum (or 45% for banks). Foreign investors should note: dividends remitted from Brazil after 2026 will be taxed, but credits will prevent outright double taxation. The interaction between the new dividend WHT and Pillar Two should be monitored, as both raise the cost of repatriating profits.
• Hybrid entities and structuring. The October update clarifies when an entity is “transparent” or “hybrid” for tax purposes. This matters for structuring: for example, a foreign partnership holding Brazilian assets may be taxed differently under Pillar Two rules. Companies should review any hybrid financing or cross-border structure. Similarly, the new securitization provisions mean that legitimate asset-financing vehicles in Brazil can avoid new taxes, but only if correctly identified under the law.
• Fiscal risk for 2026 onwards. Any miscalculation or late action could lead to significant additional taxes or penalties in 2026 filings. MNEs should reassess projections and possibly provision for extra CSLL payments. Also, foreign parent companies may see changes in their own taxes: because Brazil’s QDMTT “turns off” any home-country IIR, foreign tax authorities won’t add further top-ups on Brazil income. However, global tax authorities could audit the accuracy of the Brazil-calculated ETR. In short, companies face a more complex tax landscape: they must prove compliance across all jurisdictions or face double taxation risk and penalties.

Global Trends and Comparison

Brazil’s move is consistent with global trends. As noted, over 140 countries have committed to Pillar Two 15% minimum tax rules. Many large economies have enacted QDMTTs or similar domestic rules. For example:

• The European Union passed a directive in 2022 requiring member states to implement a 15% minimum tax (either via a domestic top-up or an income inclusion rule) by 2024.
• The United Kingdom legislated a 15% Multinational Top-up Tax effective from 2024 (for accounting periods on/after Dec 31, 2023).
• Canada is preparing its own top-up tax to apply from 2024 for large MNEs.
• Singapore will impose a 15% top-up (Domestic Top-up Tax) plus an Income Inclusion Rule starting FY2025.
• Others like Japan, Australia, and New Zealand are moving forward or considering Pillar Two measures.

The G7 nations have also signaled continued support for a minimum tax (even discussing a “side-by-side” solution accommodating U.S. tax policy). In short, businesses should expect the 15% minimum tax concept to become global standard. In this context, Brazil’s actions keep it on par with peers, helping avoid trade or tax tensions with partners.

Best Practices for Foreign MNEs

Foreign companies operating in Brazil should take proactive steps:

• Start early compliance: Build systems now to calculate Brazilian GloBE income and ETR. Coordinate with global tax teams to gather data. Use treasury or tax software as needed.
• Review tax incentives: Any special incentives (e.g. R&D, export benefits) that lower Brazil’s tax should be re-evaluated. The QDMTT will catch any “under-taxation,” so consider whether some incentives still make sense if they trigger more top-up tax.
• Leverage exclusions: Maximize the 5% substance-based carveout by substantiating tangible assets and local payroll. If Brazil facilities have real investment and jobs, document this clearly.
• Transfer pricing consistency: Ensure that intercompany pricing and transactions are arm’s-length and OECD-compliant. Any shift of profits to affiliates could inadvertently reduce the Brazilian ETR and trigger QDMTT.
• Adjust structures: Consider whether certain entities (e.g. financing SPVs) qualify for exemptions (like securitization vehicles under the new rules). Reassess financing/investment vehicles and legal form.
• Accounting process: Set up parallel accounting entries or software to track Pillar Two adjustments (foreign tax credits, DTLs, GloBE carveouts). Train your finance team on Pillar Two concepts or bring in external experts.
• Outsource where sensible: Many firms outsource Brazil accounting and compliance. Given the complexity of local tax law and frequent changes, contracting a specialized firm can ensure timely filings. For example, using experienced local accountants for monthly bookkeeping and tax submissions (including the new Pillar Two forms) can reduce errors. Outsourcing accounting and tax compliance is a proven best practice for multinationals in Brazil.
• Consult advisors: Stay updated with official guidance. International tax advisors (Big 4, law firms) offer workshops and bulletins. Also monitor Receita Federal announcements and Brazil’s GloBE guidance.

CLM Controller: Your Brazil Compliance Partner

Managing these new rules can be daunting, but you don’t have to do it alone. CLM Controller & My Business Brazil offers expert, end-to-end support for foreign multinationals in Brazil. With 40+ years in São Paulo and a team fluent in international tax, CLM provides:

• Local tax expertise: CLM’s advisers know the latest laws (including Pillar Two changes) inside out. They can calculate GloBE income, prepare top-up tax filings, and liaise with Receita Federal on your behalf.
• Accounting outsourcing: CLM can handle your Brazilian bookkeeping, payroll, and tax returns – now updated to include new minimum tax reporting. This frees your HQ to focus on core business.
• Risk management: By partnering with CLM, you reduce fiscal risk. Their auditors ensure correct application of transfer pricing, hybrid-entity rules, securitization exemptions and more.
• Strategic planning: CLM’s consulting arm advises on corporate structuring and tax planning. If the 15% floor affects your group, CLM can help redesign operations or investments to mitigate extra tax.
• Multilingual support: Through the “My Business Brazil” portal, CLM communicates complex rules in plain English. They keep you informed with alerts and analysis on Brazil’s tax reforms.
• Tailored solutions: From full-service CFO-as-a-Service to on-demand tax advice, CLM customizes its engagement to your needs.

In short, CLM Controller acts as your in-country tax and accounting department – ensuring compliance with Brazil’s new minimum tax regime while optimizing your overall tax position.

Key Takeaways

• Brazil now enforces a 15% minimum ETR on large MNEs (from FY2026) via a CSLL top-up tax, in line with OECD Pillar Two.
• Foreign subsidiaries in Brazil (of groups ≥€750M revenues) must compute GloBE income, report it, and potentially pay extra CSLL if taxed below 15%.
• October 2025 updates (IN 2282/2025) clarify many technical rules – from deferred tax tracking to hybrid entities – reinforcing Brazil’s Pillar Two alignment.
• Compliance is complex: missing or incorrect filings incur heavy penalties (up to 10% of revenue). MNEs should prepare now with robust accounting controls.
• New dividend rules (10% WHT on repatriations) also impact investors, but tax credit mechanisms mitigate double taxation.
• Globally, most major economies (EU, UK, SG, etc.) are implementing similar 15% minimum tax regimes. Brazil’s steps keep it on track with this trend.
• Best practices: start Pillar Two compliance early, review transfer pricing and incentives, consider outsourcing accounting, and work with a Brazil tax advisor.
• CLM Controller can guide foreign companies through these changes – from filing the new returns to optimizing group structure – helping reduce risk and streamline Brazil operations.

FAQ

Q: Who is subject to Brazil’s new minimum tax?

A: Any multinational group whose annual global revenue exceeds €750 million (in at least two of the last four years) and has Brazilian subsidiaries or branches. Each such Brazilian entity must ensure its local ETR (tax paid divided by GloBE income) is at least 15%.

Q: When do the new rules apply?

A: Brazil’s 15% minimum tax rules apply to fiscal years starting January 1, 2026 (with some optional early adoption from 2025). Practically, the first top-up tax would be due in 2027 on 2026 income. However, companies should begin calculations and data collection immediately.

Q: How are profits taxed under Pillar Two in Brazil?

A: Brazil uses a Qualified Domestic Minimum Top-Up Tax (QDMTT). If a Brazilian subsidiary’s effective tax rate is below 15%, Brazil imposes extra CSLL (social contribution) to “top up” to 15%. In effect, Brazil collects the shortfall before any other country can.

Q: What about profit repatriation and dividends?

A: Separately, Brazil will start taxing dividends to non-residents at 10% WHT from 2026. To compensate, Brazil gives a credit so that combined corporate tax plus 10% WHT doesn’t exceed the normal corporate rate (34% or higher for banks). So repatriated profits will face some tax, but not double taxation.

Q: How do I prepare my company?

A: Key steps include: (1) Assess if your group meets the revenue threshold. (2) Gather data on local tax, accounting profit, payroll, and assets. (3) Calculate your current ETR under the new rules. (4) Plan for any additional tax due and tax payment dates (7 months after year-end). (5) Update transfer pricing and accounting processes as needed. It’s wise to consult a Brazil tax specialist (such as CLM Controller) to guide you through the details.

Q: Can CLM Controller help with these changes?

A: Yes. CLM Controller specializes in accounting, tax, and compliance services for foreign businesses in Brazil. We can handle your GloBE calculations, tax filings, and local accounting, ensuring you meet all Pillar Two requirements. With CLM’s support, you can focus on your core business while we manage Brazilian tax compliance.