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28 June 2021

Brazilian Congress approves five-percentage-point increase to the social contribution tax for banks, insurance companies and other financial services entities

If approved by the President, the social contribution tax would increase by five percentage points for banks, insurance companies and other financial institutions beginning 1 July 2021.

The Brazilian Congress approved the conversion of Provisional Measure (PM) 1034/2021 into law, which would increase the social contribution on net profit (CSLL) by five percentage points for banks, insurance companies and other financial institutions from 1 July 2021 to 31 December 2021. The CSLL would return to the current rates as of 1 January 2022 and onwards.

If the Brazilian President approves the conversion of PM into law in the next few days, then the CSLL rates, beginning 1 July 2021, would be:

  • 25% for banks
  • 20% for insurance companies and other financial institutions

Brazilian entities may want to analyze their operations and assess the impact this rate change may have on their operations.

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For additional information with respect to this Alert, please contact the following:

EY Assessoria Empresarial Ltda, São Paulo

Ernst & Young LLP (United States), Latin American Business Center, New York

Ernst & Young LLP (United Kingdom), Latin American Business Center, London

Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific

Document ID: 2021-5714

 
 

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