Supplementary Bill No. 210/2024 – Brazilian Senate Approves Measure Restricting Tax Benefits

In the last week of 2024, the Brazilian Senate approved Supplementary Bill No. 210/2024 (“PLP 210/2024”), which includes one of the measures in the government’s cost-cutting package.

Based on the assumption of balance between expenses and collection to the government treasury, PLP 210/2024 amends Complementary Law No. 200/2023 and provides for mechanisms to reduce spending by (i) restricting tax benefits and (ii) limiting the use of tax credits.

Whenever the primary deficit is verified – which depends on the joint analysis of the accounts of National Treasury, Social Security and the Central Bank – the publication of any rule that implies the granting, expansion or extension of tax benefits will be prohibited.

PLP 210/2024 allows the creation of limitations on tax credits that can be reimbursed and refunded, to offset against taxes due, when the amount of BRL 10,000,000 (ten million reais) is exceeded. The regulation affecting the restriction of credits must observe a period of 90 days from its publication, and may differentiate the nature of the credits.

The measures will be fully effective starting in 2025, and will apply to the following financial year when the deficit is verified. Once the imbalance in public accounts is identified, the restrictions will remain until a subsequent verification of surplus in the following financial years. The text now awaits presidential approval, which is expected to occur in the following days.

For more information on this newsletter, please contact our tax team.