Changes to the charging of tax on financial operations/exchanges on foreign loans operations
Decree nr. 8.263, published in the Official Federal Gazette on June 6, 2014, has outlined a number of changes to the Tax Regulations governing financial operations/exchanges (“Decree nr. 6.306/07”), specifically on those foreign market loans agreed upon since June 5, 2014.
According to the abovementioned Decree, any exchange transactions agreed upon since June 5, 2014, including simultaneous operations regarding foreign loans subject to registration with the Central Bank of Brazil, agreed directly or upon the issue of a bond on a foreign market, with an average minimum term greater than 180 days, will benefit by the incidence of tax on exchange operations at a rate of zero percent tax.
Up until then, the exemption was applicable only to operations with a term of more than 360 days. By reducing the average minimum term for the purposes of enjoyment of the benefit, the Brazilian Government is hoping to stimulate the entry of funds into the country and avoid any devaluation of the Brazilian currency against foreign currencies.
The Felsberg Advogados Tax Department remains available for any clarification concerning the issues covered here, as well as discussion of any other tax related matters. Please contact Thiago Medaglia (firstname.lastname@example.org) on (+ 55 11) 3141-3660.
This publication is merely informative and does not contain any opinion, recommendation or legal advice on the part of Felsberg Advogados with respect to the matters here discussed.