On Nov. 17, BRZ GVT published laws on credit losses tax treatment.
BRZ GVT published Law 14.467 to provide the tax treatment for losses (Losses) incurred in receiving credit arising from the activities of financial institutions.
Applicability
Law 14.467 shall be applicable to institutions authorized to operate by the BRZ CB.
With the exception of consortium administrators and payment institutions.
Tax Treatment Highlights
Applicable institutions may deduct the Losses when determining the taxable income and the basis for calculating the Social Contribution on Net Income (CSLL).
Losses are incurred in receiving credits arising from two specified activities.
One is related to defaulted operations, regardless of date activity was contracted.
Second, operations with a legal entity under bankruptcy proceedings or under judicial reorganization, as of date of decree of bankruptcy or grant of judicial reorganization.
A transaction with a delay of over 90 days in relation to payment of principal or charges is considered to be in default; provides deductible loss value calculation.
Effectiveness
Law enters into force on date of its publication and takes effect from Jan. 1, 2025.
Regulators
BRZ CB; BRZ GVT
Entity Types
Bank; Corp; CU; Thrift
Reference
OG, 11/17/2022; Law 14.467, 11/16/2022
Functions
Actuarial and Valuation; Compliance; Financial; Legal; Tax
