Executive summary

On 29 September 2026, Brazil published Law No. 15,525/2026 (the Law), which introduces tax measures intended to address tax asymmetries and strengthen the domestic reinsurance market. The Law applies specifically to local reinsurance companies described in Article 4(I) of Complementary Law No. 126/2007. These are reinsurance companies headquartered and incorporated in Brazil as corporations, exclusively engaged in reinsurance and retrocession activities, including Brazilian subsidiaries of foreign reinsurance groups that are licensed as local reinsurers.

The Law reduces the Social Contribution on Net Profit (CSLL) rate from 15% to 9%, provides targeted relief from the 30% limitation on the use of tax losses and negative CSLL bases, and removes the 10% Corporate Income Tax (IRPJ) surtax. The CSLL and loss-utilization changes take effect on 1 January 2027, while the IRPJ surtax relief takes effect on 1 January 2030.

Key changes under Law No. 15,525/2026

Reduced CSLL rate

Law No. 15,525/2026 amends Law No. 7,689/1988 to establish a 9% CSLL rate for local reinsurance companies, replacing the 15% rate previously applicable to them. The new rate applies from 1 January 2027.

Removed 10% IRPJ surtax

The Law amends Laws No. 9,249/1995 and No. 9,430/1996 so that the 10% IRPJ surtax does not apply to local reinsurance companies. As a result, only the general 15% IRPJ rate will apply to these companies from 1 January 2030. Combined with the reduction of the CSLL rate to 9%, this effectively lowers the statutory corporate income tax burden for local reinsurers from 40% to 24%.

Relief from 30% limitation on tax-loss utilization

As a rule, Brazilian companies may use accumulated tax losses and negative CSLL bases to offset no more than 30% of the taxable profit determined in a given period, with the remaining balance carried forward without expiration. From 1 January 2027, this limitation will not apply to tax losses and negative CSLL bases generated by local reinsurance companies that have not been fully utilized within three years from the year in which they were generated.

The relief expressly extends to tax losses and negative CSLL bases that were generated before the Law's publication and remain unutilized, provided the three-year condition is met. Accordingly, the Law does not provide an immediate unrestricted offset for all balances; eligibility depends on the age and utilization status of each balance.

Key implications

Significantly, under the new Law:

• From 2027, the combined nominal IRPJ and CSLL rate for local reinsurers generally decreases from 40% to 34%, before considering the effect of tax losses and other adjustments.
• From 2030, removal of the 10% IRPJ surtax further reduces the generally applicable combined nominal rate to 24%.
• The loss-utilization relief provided may accelerate the recovery of deferred tax assets, but only for qualifying balances that remain unutilized after three years.
• The phased effective dates require separate forecasting for 2026, 2027–2029 and 2030 onward.

Next steps

Local reinsurance companies should assess how the staggered measures affect current tax positions, forecasts, deferred taxes and capital planning. The analysis should distinguish enacted changes from their respective effective dates and consider the conditions attached to the loss-utilization relief.

Depending on their particular circumstances, affected companies should consider:

• Updating tax forecasts and effective-tax-rate models to reflect the 9% CSLL rate from 2027 and the IRPJ surtax relief from 2030
• Preparing a vintage analysis of tax losses and negative CSLL bases to identify balances that satisfy, or are expected to satisfy, the three-year condition
• Reassessing the recognition, measurement and expected recovery of related deferred tax assets under the applicable accounting standards
• Reviewing tax-compliance processes, controls and supporting documentation before the 2027 changes become effective