Brazil Implements the SBTI Safe Harbour

IN RFB No. 2,342/2026, signed on 15 September 2026 and published on 18 September 2026, amends IN RFB No. 2,228/2024, which regulates Brazil’s Additional Social Contribution on Net Profit (CSLL). The Additional CSLL is Brazil’s qualified domestic minimum top-up tax, introduced by Law No. 15,079/2024.

The principal change is the incorporation of the Substance-Based Tax Incentives Safe Harbour, known in Brazil as the RSGIF. This reflects the OECD’s January 2026 Side-by-Side Package, which allows certain qualifying tax incentives to be treated as an addition to covered taxes, subject to a substance-based cap.

2026 Application

IN RFB No. 2,342/2026 updates the Brazilian reference framework to include the OECD Model GloBE Rules, Commentary, Agreed Administrative Guidance and related documents approved by the Inclusive Framework up to January 2026.

The RSGIF may be elected for fiscal years beginning on or after 1 January 2026. It is an annual election made by the Reporting Constituent Entity. The election therefore needs to be considered as part of the group’s 2026 Pillar Two compliance process.

The rule is elective rather than automatic. Groups must decide whether applying the RSGIF produces a better result after considering the amount of qualifying incentives, the substance cap, the treatment of any qualified refundable tax credits and the available supporting evidence.

How the RSGIF operates

Under Article 143-A, a multinational group may treat a Qualified Tax Incentive, (or Incentivo Fiscal Qualificado (IFQ)), as an addition to the Adjusted Covered Taxes of constituent entities located in Brazil.

The amount that may be added is limited to the lower of:

1. the amount of the IFQ used in the fiscal year; and
2. the jurisdiction’s Substance Limit.

The IFQ is not included in GloBE Income. The mechanism therefore operates through the covered-tax side of the effective tax rate calculation rather than by increasing GloBE income.

What qualifies as an IFQ?

An IFQ must reduce a current or future liability for a Covered Tax in Brazil.

The regulation excludes several categories of benefit. An incentive will not qualify where it:

-reduces a liability for a tax that is not a Covered Tax;

-relates only to expenditure incurred in generating income excluded from GloBE income;

-is a subsidy or grant, subject to specific exceptions for government assistance included in taxable income or determined by reference to an income-tax liability;

-is not generally available to taxpayers meeting the relevant statutory conditions, or is restricted exclusively to in-scope multinational groups; or

-depends on central-government discretion in relation to a critical aspect such as eligibility or amount.

A decision by the authorities confirming that a taxpayer meets objective statutory criteria is not, by itself, treated as prohibited discretion.

Expenditure-based incentives

The first principal category is the expenditure-based incentive.

The value of the relief must be based on a proportion of expenditure incurred by the taxpayer and must have a direct and clear link to the subsidised investment. The rule covers incentives granted as:

-a credit against a Covered Tax;

-an enhanced deduction; or

-an exemption or reduced tax rate applying to a defined amount of income or profit.

The regulation excludes deductions that create only temporary differences, such as accelerated depreciation or full depreciation in the acquisition period. However, an enhanced deduction exceeding the original investment or expense may qualify to the extent that the excess creates a permanent difference.

There is also an important anti-stacking rule. If several incentives relate to the same expenditure and their combined value exceeds the expenditure incurred, none of those incentives will qualify as an IFQ.

Production-based incentives