On Jul. 6, BRZ GVT published measure on tax related to credit losses.
BRZ GVT issued official publication of provisional measure (PM) 1.128 re tax treatment for losses incurred in receipt of credits from financial and other institutions in Brazil.
Adopted Measures
When determining actual profits and calculating Social Contribution on Net Income (CSLL), institutions may deduct losses incurred in receiving credits re certain activities.
Activities eligible for deduction include delinquent operations, and operations with legal entity in bankuptcy proceedings, or judicial recovery from the date of decree of same.
Operations delayed over 90 days are defaulted and value of deducted losses calculated monthly based on factors A and B x no. of months of delay from first month of default.
Eligibility
The provisions do not apply to consortium administrators and payment institutions.
Effectiveness
PM will enter into force on date of publication (Jul. 6), will take effect on Jan. 1, 2025.
