Brazil cuts local reinsurers’ CSLL and removes the IRPJ surtax

Who qualifies

The relief is confined to a “local reinsurer” within article 4(I) of Complementary Law No. 126/2007: a company seated in Brazil, constituted as a joint-stock company and having the exclusive corporate purpose of carrying on reinsurance and retrocession. It does not, on its face, extend to admitted or occasional foreign reinsurers merely because they write Brazilian risks.^[1][7]

Staggered rate changes

From 1 January 2027, amended article 3 of Law No. 7,689/1988 applies a 9% Social Contribution on Net Profit, or CSLL, rate to local reinsurers. The previous current-law treatment placed these companies within the 15% category applying to specified financial and insurance businesses. Reinsurance groups should therefore separate the 2027 CSLL change from the later IRPJ measure when forecasting Brazilian tax expense.^[1][2]

From 1 January 2030, local reinsurers will also cease to pay the 10% additional Corporate Income Tax, or IRPJ, imposed under article 3(1) of Law No. 9,249/1995 on profit above the statutory monthly threshold. Law No. 15,525 inserts a corresponding exception into article 2 of Law No. 9,430/1996, so the relief also applies where IRPJ is calculated through the monthly estimated-payment regime. The underlying 15% IRPJ rate remains in place.^[1][3][4]

Loss relief after three years

Brazil’s ordinary rules cap the use of accumulated tax losses and negative CSLL bases at 30% of adjusted profit for the period. From 1 January 2027, that cap will no longer apply to a local reinsurer’s losses or negative CSLL bases that remain unabsorbed three years after they arose. The rule expressly covers qualifying balances generated before publication of Law No. 15,525 and still unabsorbed.^[1][5][6]

Practical timing

Local reinsurers should identify loss vintages, preserve evidence supporting their calculation and update deferred-tax modelling for the staged commencement dates. The IRPJ surtax exclusion should not be applied before 2030, while the CSLL rate and aged-loss provisions begin in 2027.^[1]