Global

Details

  • Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 11/15/2013

Brazil - New tax accounting rules  

November 15: A provisional measure* published this week in Brazil is intended to establish new tax accounting rules.

Background

Brazil’s accounting rules (referred to as “new BR-GAAP”) were aligned with IFRS in 2008.


Subsequently, in 2009, a transition tax regime was introduced with the purpose of regulating how taxpayers were to compute their taxes under the new accounting environment. In general, the transition rules provided—solely for tax purposes—that companies must “book” their revenues, costs, and expenses in accordance with the existing accounting rules prior to the conversion to IFRS (i.e., under “old BR-GAAP”).

New tax accounting rules

Provisional Measure (MP) 627/2013 repeals the transition tax regime method and establishes the new tax rules to align Brazil’s tax accounting rules with the current IFRS-based accounting environment.


The new rules will affect corporate income tax (IRPJ), social contribution tax on net profits (CSLL) and gross revenue taxes (PIS/ COFINS) concerning various items of income or deductions.


Most of the changes are effective January 2014, with some effective one year later in January 2015.


Read a November 2013 report prepared by the KPMG member firm in Brazil: Tax News: MP 627/2013


*In Brazil, a provisional measure (Medida Provisória) is an “act” issued by the president, with the authority of law until later approved by Congress. The provisional measure is effective as from its date of publication for 60 days, and may be extended for an additional 60-day period (for a total of 120 days).




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