The past few weeks have been dominated by the “Tax Reform” presented by the Federal Government to the Chamber of Deputies for review. Far from being a Tax Reform, the proposed changes more closely resemble a “Tax Package,” as Bill 2337/2021 encompasses a patchwork of changes to existing tax legislation on IRPF, IRPJ, and CSLL.
The rationale for the changes is already well-known: reduce the tax burden, simplify calculation, and reduce inequalities, making taxation fairer and more effectively progressive. However, if the Tax Package is approved as initially presented—or even the substitute recently presented by the Rapporteur—there will undoubtedly be an increase in the corporate tax burden, necessitating the need to reorganize certain types of businesses.
The initial text of the bill proposes reducing the IRPJ base rate from the current level (15%) to 12.5% in 2022, and finally to 10% from 2023 onward, while maintaining the 10% surcharge. The preliminary report for the second phase of the tax reform proposed reducing the base rate to 5% in 2022 and 2.5% from 2023 onward.
Another point of the proposal is the elimination of the annual calculation regime for companies required to adopt the Real Profit system. This eliminates monthly estimates, meaning that all companies subject to the Real Profit system will calculate their calculations quarterly. In contrast, and to minimize the impact of seasonality, the Tax Loss and Negative CSLL Base calculated in a quarter may be used regardless of the 30% profit cap in the three immediately following quarters. Only after this period can individual/BNCSLL companies subject to the 30% cap be used.
In this newsletter, we will briefly present the main changes to IRPJ and CSLL, highlighted by subject.
