Originally published in the November 2 edition of World Tax Daily (Copyrights Tax Analysts – www.taxanalysts.com)
A law project now under consideration by Brazil’s House Commission of Economic Development, Industry and Trade would reduce the tax basis of the 9 percent social contribution on net income (CSL) for service companies.
Under Law Project 1,255, the CSL tax basis would be reduced to 12 percent of gross receipts for certain service activities. Currently, companies calculate CSL as 9 percent of a tax basis that is equal to 32 percent of monthly gross receipts. Eligible activities include business agency services, real estate management and leasing, factoring activities, and other professional and nonprofessional services.
The law project is designed to reverse the increase in the tax basis introduced by Law 10,864/2003 and to reestablish the former 12 percent CSL basis applicable to service providers and other companies that use the presumed method to calculate their income tax.
If approved by the Commission of Economic Development, Industry, and Trade, the law project will be forwarded to the House Commission of Finance and Taxation and the Commission of Constitution and Justice. Because in this case the commissions have conclusive powers over the law project, their unanimous approval will forward the law project directly to the Senate with no need for a discussion and vote by the full House of Representatives.
David Roberto R. Soares da Silva