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Tax assets and liabilities
 12 Months Ended
Dec. 31, 2025
Notes and other explanatory information [abstract]  
Tax assets and liabilities

 

23.Tax assets and liabilities

a) Income tax and social contribution

The total charges for the period can be reconciled with the accounting profit as follows:

     
Thousand of Reais 2025 2024 2023
       
Operating Profit Before Tax 16,728,994 19,190,228 11,921,651
Tax Rate  (25% income tax and 20% social contribution tax) (3) (7,528,047) (8,635,601) (5,364,743)
PIS and COFINS (net of income and social contribution taxes) (1) (4,605,498) (3,258,281) (3,789,866)
Non-taxable/Non-deductible:      
Equity method 206,241 140,870 108,380
Non-Deductible Expenses Net from Non-Taxable Income  (2) 1,911,762 1,345,411 1,016,111
Adjustments:      
Recognition (Reversal) of Income/Social Contribution Taxes on Temporary Differences  193,371 (224,038) 127,166
Interest on Equity  3,376,308 2,589,128 2,660,040
Effect of CSLL (Social Contribution on Net Profit) Rate Difference  (3) 970,695 1,441,329 684,133
Other adjustments 1,711,297 824,718 2,135,940
Income taxes  (3,763,871) (5,776,465) (2,422,839)
Comprising:      
  Current taxes (8,068,996) (6,193,804) (7,962,995)
  Deferred taxes 4,305,125 417,339 5,540,156
Taxes paid during the fiscal year (6,509,969) (5,423,514) (5,892,511)
(1) PIS and COFINS are considered as components of the profit base (net base of certain income and expenses); therefore, in accordance with IAS 12, they are recorded as income taxes.
(2) It mainly includes the tax effect on income from updates to judicial deposits and other income and expenses that are permanent differences.
(3) In the Consolidated Financial Statements, we account for the difference in CSLL (Social Contribution on Net Profit) tax rates of 9% (non-financial companies), 15% (financial companies), and 20% (banks).

 

Foreign Exchange Hedge of the Grand Cayman and Luxembourg Branches

Banco Santander operates branches in the Cayman Islands and Luxembourg, which are primarily used for raising funds in international capital and financial markets, providing the Bank with credit lines that are extended to its clients for trade financing and working capital.

To hedge against exchange rate fluctuations, the Bank uses derivatives and funding. According to Brazilian tax rules, gains or losses resulting from the impact of the Real's appreciation or depreciation on foreign investments are taxable or deductible for income tax/social contribution purposes, while gains or losses from derivatives used as hedging are also taxable or deductible. The purpose of these derivatives is to protect net income after taxes.

The still distinct tax treatment for PIS and COFINS taxes on such exchange rate differences results in volatility in "Operating Profit before Tax" and in the "Income Tax" item. The effects of the transactions carried out, as well as the total effect of the exchange rate hedge for the fiscal years ending December 31, 2025, 2024, and 2023, are detailed below:

 

     
Thousand of Reais 2025 2024 2023
Foreign exchange fluctuations (net)      
Gains (losses) arising from exchange rate fluctuations on the Bank’s investments in the Cayman and Luxembourg Branches (7,474,761) 13,627,778 (3,281,452)
Gains (losses) on financial assets and liabilities      
Income generated from the use of derivative contracts as foreign exchange hedge 7,838,473 (14,292,394) 3,444,617
Income Taxes      
Tax effect of derivative contracts used as hedge - PIS/COFINS (363,712) 664,616 (163,165)

 

b) Effective tax rate calculation

The effective tax rates are:

     
Thousand of Reais 2025 2024 2023
Operating Income Before Tax 16,728,994 19,190,228 11,921,651
Income Tax  (3,763,871) (5,776,465) (2,422,839)
Effective tax rate  22.50% 30.10% 20.32%

 

c) Tax recognized in equity

In addition to the income tax recognized in the consolidated income statement, the Bank has recorded the following amounts directly in equity:

     
Thousand of Reais 2025 2024 2023
Tax credits recognized in equity 315,477,464 339,389,357 139,356,609
Measurement of securities at fair value through other comprehensive income 308,792,800 333,401,042 136,550,936
Measurement of cash flow hedge 3,032,990 2,607,676 223,487
Measurement of investment hedge 1,421,361 562,353 562,353
Measurement of defined benefit plan 2,230,313 2,818,286 2,019,833
Tax expenses recognized in equity (320,585,520) (346,808,871) (140,799,732)
Measurement of securities at fair value through other comprehensive income (309,559,753) (335,837,710) (133,417,362)
Measurement of cash flow hedge (3,361,605) (2,628,353) (430,444)
Measurement of investment hedge (1,421,361) (1,421,361) (1,421,361)
Measurement of defined benefit plan (6,242,801) (6,921,447) (5,530,565)
Total (5,108,056) (7,419,514) (1,443,123)

 

This pertains to deferred tax liabilities recognized in equity, arising from temporary differences accounted for in equity.

 

d) Deferred taxes

The balances of “Deferred Tax Assets” and “Deferred Tax Liabilities” are presented as follows:

 

           
Thousand of Reais         2025 2024
             
Deferred Tax Assets         50,854,830 48,223,877
    Comprising:            
    Temporary differences (1)         45,562,986 42,737,528
    Tax loss         5,291,844 5,486,349
Total deferred tax assets         50,854,830 48,223,877
             
Deferred tax liabilities         4,589,099 5,689,440
  Comprising:            
        Excess depreciation of leased assets       414,762 394,257
     Fair value adjustment of trading securities and derivatives          4,174,337 5,295,183
 Total deferred tax liabilities         4,589,099 5,689,440
(1) Temporary differences primarily related to impairment losses on loans and receivables, provisions for judicial and administrative proceedings, and the effect of the fair value on financial instruments.

 

The changes in the balances of “Deferred Tax Assets” and “Deferred Tax Liabilities” over the last three fiscal years were the following:

 

         
Thousand of Reais Balances at December 31, 2024

Adjustment to

Income

 Fair value adjustments  (1) Other (2) Balance on December 31, 2025
           
Deferred Tax Assets 48,223,877 3,110,827 (573,469) 93,595 50,854,830
Temporary differences 42,737,528 3,305,332 (573,469) 93,595 45,562,986
 Tax loss 5,486,349 (194,505) - - 5,291,844
Deferred Tax Liabilities:  5,689,440 (1,194,298) 247,771 (153,814) 4,589,099
Temporary differences 5,689,440 (1,194,298) 247,771 (153,814) 4,589,099
Total 42,534,437 4,305,125 (821,240) 247,409 46,265,731
           
Thousand of Reais Balances at December 31, 2023

Adjustment to

Income

 Adjustments to fair value (1) Other (2) Balance on December 31, 2024
           
Deferred Tax Assets 43,445,704 3,124,515 2,460,496 (806,838) 48,223,877
Temporary differences 37,877,300 3,206,570 2,460,496 (806,838) 42,737,528
Tax loss 5,561,066 (74,717) - - 5,486,349
CSLL 18% 7,338 (7,338) - - -
Deferred Tax Liabilities:  3,699,432 2,238,539 597,555 (846,086) 5,689,440
Temporary differences 3,699,432 2,238,539 597,555 (846,086) 5,689,440
Total 39,746,272 885,976 1,862,941 39,248 42,534,437

(1) Refers to the tax recognized in equity.

(2) In 2025, it refers mainly to the net of deferred taxes in the amount of R$247,409 (2024 – R$39,248 and 2023 – R$63,753), which have the same counterparty and realization period.

 

e) Expected realization of deferred tax assets

         
  Deferred Tax Assets Deferred Tax Liabilities
Year Temporary differences Tax losses Total Temporary differences Total
2026 9,572,148 36,844 9,608,992 1,092,810 1,092,810
2027 6,937,859 1,090,696 8,028,555 1,095,782 1,095,782
2028 6,129,936 2,304,325 8,434,261 870,727 870,727
2029 5,162,834 1,854,527 7,017,361 850,912 850,912
2030 4,908,139 3,730 4,911,869 151,612 151,612
2031 to 2035 12,852,070 1,722 12,853,792 222,694 222,694
After 2036 - - - 304,562 304,562
Total 45,562,986 5,291,844 50,854,830 4,589,099 4,589,099