Brazil Corporate Income Taxes: IRPJ and CSLL Explained

Brazil taxes corporate profits with two federal levies that work side by side: the corporate income tax (IRPJ) and the Social Contribution on Net Income (CSLL). Together they produce the familiar combined nominal rate of 34% for most companies, but the base can be actual profit, a presumed profit set by law or, in rare cases, an arbitrated profit. For a foreign investor, understanding how these two taxes are calculated explains much of the subsidiary’s effective tax rate, the cash calendar and the decisions taken at the start of each year. This guide explains the essentials.

The rates

For a non-financial company, profit above the surcharge threshold is taxed at 15% + 10% + 9% = 34%.

Three ways to calculate the base

Lucro Real (actual profit)

The base is the accounting profit adjusted by additions and exclusions required by tax law, recorded in the tax books (e-LALUR and e-LACS) within the annual tax return (ECF). Key rules:

• Non-deductible expenses include general provisions (except vacation and 13th salary accruals), gifts, donations not allowed by law and expenses not related to the business (Law 9,249/1995, article 13).
• Tax losses can be carried forward indefinitely, but each year’s offset is limited to 30% of the adjusted taxable profit, for IRPJ and CSLL alike (Law 9,065/1995, articles 15 and 16).
• Interest on net equity (JCP) paid to shareholders is deductible within limits, and since 2026 is subject to 17.5% withholding tax.
• Lucro Real is mandatory above R$78 million of annual revenue, for companies with profits from abroad and for financial institutions, among others.

Lucro Presumido (presumed profit)

The base is a percentage of gross revenue set by law, plus other income such as financial income and capital gains, regardless of actual profit:

Since 2026, Complementary Law 224/2025 has increased these percentages by 10% (for example, 32% becomes 35.2%) on the portion of annual revenue above R$5 million. Lucro Presumido is available only to companies with revenue up to R$78 million in the previous year that are not required to use Lucro Real. See Lucro Real or Lucro Presumido for a foreign-owned subsidiary.

Lucro Arbitrado (arbitrated profit)

Used mainly when the books are missing or unreliable: the presumption percentages are increased by 20%. It is a fallback that companies should avoid by keeping proper books.

Periods and payment dates

• Quarterly calculation: quarters end on March 31, June 30, September 30 and December 31. Tax is due by the last business day of the following month, in a single payment or up to three monthly installments with interest (each at least R$1,000).
• Annual calculation (Lucro Real only): the company pays monthly estimates, based on presumed percentages of revenue or on interim balance sheets, by the last business day of the following month, and settles the balance by the last business day of March of the next year. Failing to pay an estimate is penalized even if the year ends with a loss.

The choice between quarterly and annual calculation, like the choice of regime, is made with the first payment of the year. See monthly tax compliance in Brazil.

Related rules foreign groups should know

• Dividends: paid out of profit after IRPJ and CSLL; since 2026, dividends remitted abroad bear 10% withholding tax, with a credit mechanism when the combined burden exceeds 34% (see Brazil’s 10% tax on dividends paid abroad).
• Pillar Two: groups with consolidated revenue of at least €750 million may owe an Additional CSLL to reach a 15% effective rate in Brazil (see Pillar Two in Brazil).
• Tax reform: the consumption tax reform replaces PIS, Cofins, IPI, ICMS and ISS, but does not change IRPJ or CSLL.
• Transfer pricing: intercompany transactions follow the arm’s length principle and affect the taxable base under any regime (see our transfer pricing guide).

How Solidy can help

Solidy already serves subsidiaries of multinational companies in Brazil. Our tax and accounting teams model the regime and calculation method for each year, keep the tax books under Lucro Real or calculate Lucro Presumido, and pay and file IRPJ and CSLL on the calendar. See our tax advisory service or talk to our consultants.