Brazil: Temporary increased rate of social contribution on net income of banks, financial institutions

The provisional measure has received legislative approval.

The provisional measure has received legislative approval.

A provisional measure—Medida Provisória n° 1.034/2021—that temporarily increases the rate of a social contribution on the net income of financial institutions (Contribuição Social sobre o Lucro Líquido—CSLL) has received legislative approval. 

The provisional measure has been transformed into Law n° 14.183/21. Under this legislation:

  • The CSLL rate for banks increases to 25% (from 20%) for the year ending 31 December 2021, and then returns to 20% in 2022.
  • The CSLL rate for other financial institutions, credit card companies, and private insurance and capitalization companies also increases to 20% until the end of 2021, and returns to the current rate of 15% in 2022. 

KPMG observation

In Brazil, a provisional measure (Medida Provisória) is an “act” issued by the president, with the authority of law until it is later approved by the national legislature. Until it is transposed into law, a provisional measure generally is effective from its date of publication for a 60-day period (subject to an extension for an additional 60-day period (for a total of 120 days)).

Read a July 2021 report (Portuguese) prepared by the KPMG member firm in Brazil


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