The Brazilian National Congress overruled the presidential veto to article 60 of Law No. 13.986 of 2020 (“Lei do Agro”), which created the Withholding Income Tax (“IRF”) of 15% on the revenues derived from the sale of decarbonization credits (“CBios”) in organized markets created by the RenovaBio program.
Without the veto, WIT at source will be levied on the revenue derived from all CBios trading, opposite to the general rule that provides for the levy of the Corporate Income Tax (“IRPJ”) and the Social Contribution on o Net Income (“CSLL”) at a combined rate of up to 34%. As consequence, the revenue earned on CBios trades will not be included in the calculation of the actual or presumed profit methods for calculating the income for the calendar year, and any losses accrued will also not be tax deductible in the calculation of the IRPJ and CSLL based on the real profit method.
We remain available for clarification.