On March 1, 2020, Provisional Measure No. 1,034/2021 ("MP"), which amends Law No. 7,689 / 1988 to increase the rates of the Social Security Contribution on Net Income (“CSLL”) payable by legal entities that operate in the financial sector, was published in the Official Gazette.

According to the MP, the CSLL rate, currently levied at 15% on the taxable income accrued by legal entities that operate in the financial sector, will be:

  • 20% until December 31, 2021, and return to 15% as of January 1, 2022 for the following entities: private insurance companies, capitalization companies, distributors of securities; foreign exchange and securities brokers; credit, financing and investment companies; real estate credit companies; credit card administrators; leasing companies; savings and loan associations; as well as stock, commodity and futures exchanges
  • 25% until December 31, 2021, and 20% as of January 1, 2022, for banks of any kind.

The new rates will be applicable only from the first day of the fourth month following the publication of the MP—in other words, from July 1, 2021—in accordance with the 90-day holding period set forth by the Federal Constitution.

For more information related to this Legal Update, please contact our Tax team.