MP limits deduction of bank losses when calculating real profit and CSLL

The President of the Republic, Luiz Inácio Lula da Silva, issued a provisional measure to limit a benefit to banks established in law 14,467 of 2022, applicable to losses incurred in receiving credits arising from the activities of financial institutions and other institutions authorized to operate by the Bank Central. The MP was published in an extra edition of Official Gazette of the Union this Wednesday, 2nd.

The original law establishes that, from January 1, 2025, banks will be able to deduct, when determining real profit and the Social Contribution on Net Profit (CSLL) calculation basis, losses incurred in receiving credits arising from activities related to defaulted operations, regardless of the date of their contracting; and operations with companies in bankruptcy proceedings or in judicial recovery, from the date of the declaration of bankruptcy or the granting of judicial recovery.

The MP establishes that losses determined on January 1, 2025 relating to credits that are in default on December 31, 2024, and which have not been deducted by that date nor have been recovered, can only be excluded from net profit in the determination of the real profit and the CSLL calculation basis “at the rate of 1/84 for each month of the calculation period, starting from January 2026”.

According to the text, institutions can choose until December 31, 2025, irrevocably and irreversibly, to make deductions at the rate of 1/120 for each month of the calculation period, starting in January 2026.

“Institutions are prohibited from deducting losses incurred relating to the 2025 financial year in an amount greater than the actual profit for the year, before this deduction is computed”, adds the MP.