Brazil Amends Tax Code: Caps Fines, Adds Proportionality Rules

Brazil's Complementary Law 236/2026, sanctioned September 4, amends the National Tax Code (CTN), introducing Article 113-A that mandates reasonableness and proportionality in tax penalties, capping fines at 75% of tax owed, rising to 100% for fraud or evasion. This is a legislative change to tax administration, not a market-moving event, but it may reduce taxpayer uncertainty and litigation risk.