Brazil Pillar Two Disclosures: Company Filing Evidence

A Pillar Two disclosure in a filing by a group with Brazilian operations is not a single number. In the filings reviewed here, the underlying fact may be a stated settlement, a current tax expense, an income-tax payable, a provision, a reversal or a materiality judgment. Combining those labels in one “Brazil exposure” figure can distort both the close and the cash forecast.

Direct answer

Items 4A and 88A–88D of CPC 32, made mandatory for publicly held companies by Article 1 of CVM Resolution 197/2023, frame the accounting disclosures compared here. Filings from six groups with Brazilian operations contain nine source-bounded Pillar Two observations across 2025–2026. They can be compared only after preserving the accounting object, reporting date, fiscal year, unit, jurisdiction and limit of each statement. A financial-statement note, Brazil’s payment and DCTFWeb stream, the future local ancillary return and the OECD GloBE Information Return (GIR) are related, but they are not interchangeable evidence.

This is a decision benchmark, not a census or a ranking. It uses primary filings from six groups with Brazilian operations—Afya, ISA Energia Brasil, Braskem, Vale, Cosan and TIM—together with official accounting and compliance sources. Some observations concern Brazil; others are expressly jurisdiction-specific or multi-jurisdictional. For the legal architecture and calculation sequence, use TaxUp’s Brazil and OECD Pillar Two guide. The narrower question here is what an international decision-maker can safely carry from a public note into a closing memo or board paper.

What the six-company benchmark actually shows

Nine observations, classified by what the source actually reports
Company	Reported object	Decision-useful reading	Inference to avoid
Afya	FY2025 current tax expense/payable; later stated FY2025 settlement; June 2026 provision; H1 2026 current expense.	Keep year-end recognition, the later stated settlement and interim-period recognition on separate timelines.	Treating four figures as a roll-forward when the opened passages provide no bridge or settlement method.
ISA Energia Brasil	R$65.357 million expense and liability.	Recognition is evidenced; payment is not.	Repairing an unexplained difference between printed percentages.
Braskem	Full reversal of a provision in a specific Dutch context, without a separately disclosed amount.	Preserve jurisdiction and the absence of an isolated value.	Assigning an unrelated reconciliation line to the reversal.
Vale	Qualitative “no material impacts” conclusion for 2025 income-tax expense.	Read materiality against the stated line and period.	Converting “not material” into no tax, data, work or future exposure.
Cosan	Preliminary qualitative expectation across a multi-jurisdiction assessment.	Record the conclusion as preliminary and updateable.	Equating eleven mapped jurisdictions with eleven liabilities or a completed safe-harbour test.
TIM	No significant impacts resulting from the IAS 12/CPC 32 Pillar Two amendments identified for 2025; analysis of possible Pillar Two impacts beginning in 2026.	Preserve the 2025 statement’s accounting-amendment referent and classify the 2026 position as assessment in progress.	Turning either statement into a quantified Brazil QDMTT exposure, provision or safe-harbour conclusion.

The benchmark’s useful unit is not “company impact.” It is a source-bounded observation: object, period, unit, jurisdiction, documentary reference and permitted conclusion. This turns heterogeneous language into a comparable control framework without pretending that unlike amounts measure the same thing.

Why the accounting rule produces different disclosure objects

IAS 12 and Brazil’s CPC 32: the rule behind the labels
Provision	What it addresses	What a reader should look for
CPC 32 item 4A	Temporary exception from recognising and disclosing deferred tax assets and liabilities “relacionados aos tributos sobre o lucro do Pilar Dois”.	Do not infer a complete Pillar Two deferred-tax position from the ordinary deferred-tax note.
CPC 32 item 88A	The entity must “divulgar que aplicou a exceção” in item 4A.	Identify whether the exception is expressly acknowledged.
CPC 32 item 88B	The entity must “divulgar separadamente sua despesa (receita) de imposto corrente” related to Pillar Two.	Separate current expense from liability, payment and deferred-tax language.
CPC 32 items 88C–88D	Known or reasonably estimable exposure while legislation has been “promulgada ou substancialmente promulgada, mas ainda não estiver em vigor”; otherwise the entity discloses progress in its assessment.	Read qualitative or range-based pre-effective disclosure within that timing condition, not as a permanent substitute for all later-period information.

The IASB’s official summary says the 2023 amendments to IAS 12 introduced both a temporary deferred-tax exception and targeted disclosures. The CPC issued the corresponding changes to CPC 32. For publicly held companies, Article 1 of CVM Resolution 197/2023 makes CPC Review No. 24 mandatory; its Annex A contains items 4A and 88A–88D. This is the regulatory scope used here, not a claim that the CVM resolution directly governs every Brazilian entity. See also the IFRS Foundation’s IAS 12 page.

That structure is why “no Pillar Two deferred tax recognised,” “current Pillar Two tax expense,” and “no material impact” are not synonyms. They answer different accounting questions.

Afya: four figures across two reporting dates, with no published bridge

Afya — preserve source date, accounting object and the settlement-method boundary
Source and date	Figure	What the filing says	Boundary
FY2025 20-F; 31 Dec 2025 position	R$109.458m	Additional income-tax expense under Law 15,079/2024, accounted as income taxes payable in current liabilities.	Expense/payable at year-end; not evidence of cash payment.
H1 2026 6-K; statement that refers to FY2025	R$89.892m	FY2025 obligation stated as fully settled on 31 Jul 2026.	The stated settlement occurred after the 30 Jun 2026 reporting date; the filing passage does not identify the settlement method.
H1 2026 6-K; 30 Jun 2026 position	R$50.012m	Provision for Brazil’s Additional CSLL for 2026.	Provision at the reporting date; not proof of payment.
H1 2026 6-K; six months ended 30 Jun 2026	R$30.446m	Current Pillar Two tax expense for the interim period.	Period expense; do not add it to the FY2025 settlement or the closing provision.

Afya’s FY2025 Form 20-F, note 2.3(q), p. F-23, states that the additional income-tax expense for the year ended 31 December 2025 was R$109.458 million and was accounted as income taxes payable in current liabilities. The same passage says, in the Form 20-F filed on 31 March 2026, that the company had recorded the amount calculated under current legislation because there was no court decision “to date”. This proves recognition and classification at the year-end reporting date; the litigation-status statement is treated as current only through that annual-report filing, and neither statement proves payment.

Afya’s later 30 June 2026 interim statements, note 19, report an FY2025 obligation of R$89.892 million that was fully settled on 31 July 2026. The arithmetic difference between the two published figures is R$19.566 million. The passages opened for this review contain no explicit bridge explaining that difference, so it must remain unresolved: it is not labelled here as an error, a final balance, a reversal or an identified adjustment.

Board question. Can the Brazil close file reconcile the 31 December expense/payable, the amount later described as the FY2025 obligation, and the stated 31 July settlement with dated journal entries, evidence of the settlement method and an approved explanation—without treating the public filings themselves as the roll-forward?

Settlement does not prove the status of the litigation. Afya’s FY2025 20-F, filed on 31 March 2026, says a writ of mandamus was filed on 28 March 2025 and that the amount was recorded because there was no court decision “to date”. Article 36 of Law 15,079/2024 says the Additional CSLL “será considerado não recolhido” when it is, directly or indirectly, subject to judicial or administrative litigation and may not be used as a credit under the GloBE Rules. The later 31 July 2026 settlement does not, by itself, establish whether the litigation was then pending, withdrawn or resolved—or how the obligation was settled. That status and its consequence must be evidenced separately; this benchmark does not conclude that credit was denied in Afya’s case.

ISA Energia Brasil: recognition is clear, but the printed percentages do not self-reconcile

Period and document: FY2025; financial statements authorised on 24 Feb 2026 and included in the management proposal dated 25 Feb 2026.
Reference and unit: Notes 12.2, p. 91, and 21.2/21.2.1, pp. 115–116; R$ thousands.
Reported object: R$65.357 million recognised as Additional CSLL expense and liability.
Printed rates: 15.0% minimum rate, 6.9% effective tax rate and 8.4% additional rate.
Primary source: ISA Energia Brasil FY2025 financial statements.
Boundary: 15.0% minus 6.9% equals 8.1 percentage points. The opened source does not explain why the table prints 8.4%, and it does not provide a subsidiary-level calculation that would permit this article to repair the difference.

The R$65.357 million figure supports an accounting-recognition statement, not a cash statement. A decision paper should therefore identify it as expense and liability. It should also preserve the published percentage difference as an open item rather than calling it rounding or reverse-engineering the amount from incomplete inputs.

Braskem: a full reversal without a separately disclosed amount

Period and document: FY2025; financial statements dated 26 Mar 2026 and Form 6-K filed 27 Mar 2026.
Reference: Note 20.2(d), pp. 76–77.
Reported object: In the Dutch subsidiary context described, tax-sparing credits were considered, the provision was fully reversed and no additional tax was recognised there.
Primary source: Braskem FY2025 financial statements.
Boundary: The paragraph does not disclose the reversal as a standalone amount. Other reconciliation lines cannot be renamed as that amount, and the Dutch result does not decide the treatment of a Brazilian incentive.

The case shows why the jurisdictional layer matters. The source supports a reversal in the stated Dutch context, not a group-wide conclusion and not a Brazilian legal rule. It also does not, by itself, establish that a transitional safe harbour applied. “No additional tax recognised,” a provision reversal and a safe-harbour outcome are separate propositions with separate evidence.

Vale, Cosan and TIM: materiality and assessment status have a perimeter

Three qualitative statements, each bounded by its own language and reporting date
Company	What was disclosed	Permitted conclusion	Not established
Vale	Note 5(f), p. 19: “no material impacts” on 2025 income-tax expense; the note also mentions the IAS 12 temporary exception.	The reported effect on that line and period was not material.	Zero tax, zero compliance work, zero data requirements or the same conclusion in a future period.
Cosan	Note 15: management’s preliminary expectation that neither material impacts nor material Pillar Two liabilities would arise in 2025, with eleven jurisdictions mentioned in the assessment.	Management published a preliminary, updateable expectation based on information then available.	A final calculation, a confirmed safe harbour, zero payment or eleven liabilities.
TIM	Note 8.d: no significant impacts resulting from the IAS 12/CPC 32 Pillar Two amendments identified during 2025; in 2026 the company was beginning analyses of possible Pillar Two impacts.	The 2025 accounting-amendment statement and the 2026 assessment status can be reported exactly as dated.	A quantified Brazil QDMTT exposure, provision, liability, payment or safe-harbour eligibility.

Vale’s conclusion appears in its FY2025 financial statements, note 5(f). Cosan’s appears in its FY2025 financial statements, note 15. TIM’s quarterly information at 30 June 2026, note 8.d, p. 51, says it had not identified significant impacts in 2025 resulting from the IAS 12/CPC 32 Pillar Two amendments and that it was beginning analyses in 2026 to assess possible Pillar Two impacts. These statements are not shortcuts around the underlying calculation and governance. Materiality qualifies a particular reported effect, while “beginning analyses” identifies process status; neither erases the work needed to support a later conclusion.

A safe harbour is not another word for “not material”

Three statements that should never be merged in a board paper
Statement	Evidence it needs	What it does not prove
A safe harbour applies	Named safe harbour, tested period and jurisdiction, rule version, inputs and retained workpaper.	That no filing, notification, data retention or future retest is required.
The effect is not material	Identified financial-statement line, reporting period and approved materiality assessment.	That the legal liability or compliance population is zero.
No additional tax was recognised	Jurisdictional calculation and accounting conclusion for the stated period.	That a safe harbour necessarily produced the result or that another jurisdiction follows it.

A group may reach more than one of these conclusions, but each must keep its own proof. For the broader relationship between entity-level adjustments and jurisdictional outcomes, see TaxUp’s Transfer Pricing and Pillar Two analysis.

Financial statements, payment, the local return and the GIR are four evidence streams

What each stream answers—and what it cannot replace
Stream	Question answered	Official timing point used here	Do not substitute it for
Financial statements	What was recognised, classified or judged material at a reporting date?	Issuer-specific reporting period and approval date.	Payment receipt, tax-return acceptance or GIR transmission.
Brazil payment and DCTFWeb	What domestic amount was declared and paid, by whom and when?	For a jurisdictional fiscal year ending 31 Dec 2025, the RFB stated a 31 Jul 2026 deadline for both the relevant DCTFWeb process and payment.	The detailed local ancillary return or the GIR.
Brazil local ancillary return	What information supports the Additional CSLL calculation?	On 8 Jul 2026, the RFB said the instrument was under development and that the first-year return would be required no earlier than 30 Jun 2027 for a 31 Dec 2025 year-end.	The OECD GIR or a financial-statement note.
GIR	What standardised information allows implementing jurisdictions to evaluate the MNE’s global minimum-tax liability?	The OECD’s 11 Sep 2026 package says the updated GIR applies to fiscal years commencing on or after 31 Dec 2025; a revised XML schema was still being developed.	Brazil’s domestic payment, DCTFWeb information or local ancillary return.

The date-sensitive statements above come from the Brazilian Federal Revenue Service guidance of 8 July 2026 and the OECD package of 11 September 2026. They are kept separate because the OECD describes the GIR as a standard information return, while the RFB separately describes domestic payment, DCTFWeb information and a local ancillary obligation under development.

The close-to-board checklist for a foreign parent

Name the object: payment, payable, provision, current expense, reversal, materiality judgment or safe-harbour result.
Fix the timeline: fiscal year, reporting date, recognition date, payment date and filing date.
Preserve the unit: source currency, thousands or millions, percentage or qualitative conclusion.
Fix the perimeter: Brazilian entity, jurisdictional position, foreign subsidiary context or consolidated group.
Reconcile the evidence: note, page, tax workpaper, journal entry, return, payment receipt and responsible reviewer.
Keep the streams separate: financial statements, payment/DCTFWeb, local ancillary return and GIR.
Label unresolved differences: show the arithmetic and the missing bridge without inventing a cause.
Record the next trigger: new filing, restatement, tax-authority guidance, court decision or changed safe-harbour input.

The checklist changes the executive question from “What is our Brazil Pillar Two number?” to “Which fact is this number, for which date and entity, and which record proves it?” The latter question can be audited. The former often merges accounting, cash and compliance into a figure that no underlying document actually contains.

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Frequently asked questions on Brazil Pillar Two disclosures

Section map. These answers distinguish expense from payment, explain the Afya difference, bound materiality and safe-harbour language, and separate the local return from the GIR.

Is a Pillar Two current tax expense the same as tax paid?

No. Current tax expense belongs to the result for a reporting period. Payment requires evidence of a cash transfer or another identified settlement method, its date and the fiscal year settled. Afya’s filings establish only that the obligation was described as fully settled on 31 July 2026, after the interim reporting date; the opened passage does not identify the settlement method.

Does the R$19.566 million difference between Afya’s filings identify an error or adjustment?

No. It is the arithmetic difference between R$109.458 million reported as FY2025 expense/payable in the 20-F and R$89.892 million later described as the FY2025 obligation settled on 31 July 2026. The opened passages provide no explicit bridge, so this article does not label the difference as an error, final balance, reversal or identified adjustment.

Does “no material impact” mean there is no Pillar Two obligation?

No. Materiality qualifies the identified financial-statement effect for a stated period. It does not independently establish that tax, data, controls, filings or future exposure are zero.

Does a no-tax conclusion prove that a safe harbour applied?

No. A safe-harbour conclusion needs its own named test, period, jurisdiction, inputs and retained evidence. “No additional tax recognised” or “not material” can arise from a different analysis and should not be relabelled.

Is Brazil’s local Additional CSLL return the same as the GIR?

No. The RFB described a domestic ancillary obligation for the Additional CSLL, while the OECD describes the GIR as the standard information return used by implementing jurisdictions to evaluate an MNE’s global minimum-tax liability. Payment and DCTFWeb are separate again.

Does Afya’s stated 31 July 2026 settlement prove that its litigation was resolved?

No. The FY2025 20-F, filed on 31 March 2026, reports a writ of mandamus and says there was no court decision “to date”. Article 36 of Law 15,079/2024 attaches consequences when the Additional CSLL is subject to litigation, but the later stated settlement does not prove whether the proceeding remained pending, was withdrawn or was resolved—or how the obligation was settled. A current docket and company records would be needed; this benchmark does not conclude that credit was denied.

Sources, method and limits of this comparison

Primary sources and the proposition each one supports
Source	Document reference	Proposition supported
Afya	FY2025 20-F, note 2.3(q), p. F-23; H1 2026 interim statements, note 19.	Year-end expense/payable; later FY2025 settlement; interim provision and current expense; no bridge asserted.
ISA Energia Brasil	FY2025 statements, notes 12.2 and 21.2/21.2.1.	Expense/liability recognition and the printed percentage difference.
Braskem	FY2025 statements, note 20.2(d).	Dutch-context reversal and absence of a standalone reversal amount.
Vale	FY2025 statements, note 5(f).	Qualitative materiality conclusion for 2025 income-tax expense.
Cosan	FY2025 statements, note 15.	Preliminary materiality expectation and eleven-jurisdiction mapping.
TIM	Quarterly information at 30 Jun 2026, note 8.d, p. 51.	2025 statement about impacts resulting from the IAS 12/CPC 32 amendments and 2026 Pillar Two assessment-in-progress status.
CVM / IFRS Foundation	CVM Resolution 197/2023, Article 1 and Annex A; IAS 12 official overview.	Publicly held-company adoption scope, deferred-tax exception and targeted disclosure architecture.
RFB / OECD	Official releases dated 8 Jul and 11 Sep 2026.	Domestic compliance streams and the updated GIR timing statement.
Brazilian Presidency	Law 15,079/2024, Article 36.	Statutory consequence when the Additional CSLL is subject to litigation; no inference about Afya’s later procedural status.

The method was to open each primary source, record the reporting period, document date, note or page, unit and short mirror text, classify the reported object, and write both a permitted conclusion and an explicit boundary. Six companies and seven issuer documents yield nine observations because the Afya material spans two reporting dates and four distinct facts. No amounts were aggregated across rows or companies.

The sample is purposive, not exhaustive. It does not measure prevalence, rank companies, validate any group’s full calculation or turn an issuer disclosure into legal precedent. Public filings prove what the issuer reported; they do not give access to all workpapers. Date-sensitive compliance statements must be rechecked whenever the RFB or OECD releases a new instrument.

Primary-source cut-off: 12 September 2026. Issuer filings: Afya FY2025 20-F and H1 2026 6-K; ISA Energia Brasil, Braskem, Vale and Cosan FY2025 statements; TIM quarterly information at 30 June 2026. Official framework: CVM Resolution 197/2023, IFRS Foundation IAS 12 overview, RFB guidance dated 8 July 2026 and OECD announcement dated 11 September 2026.