Today it was published the Decree Nr. 7,693, dated February 29,
2012, which amended certain rules of the Tax on Financial
Transactions Regulation ("RIOF"), approved by Decree Nr.
6,306, dated December 14, 2007, specially concerning the assessment
of the tax on foreign exchange transactions ("IOF/FX") on
the inflow of funds in Brazil.
In this sense, the minimum average term of foreign loans subject
to the IOF/FX at a 6% rate, on the foreign exchange transaction
related to the inflow of the respective funds in Brazil, was
increased from 720 days to 3 years. Up until this date, the foreign
exchange transactions carried out in connection with the inflow of
funds related to foreign loans with minimum average term longer
than 720 days were subject to the IOF/FX at a 6% rate. With the new
rules, such zero percent rate is now applicable to foreign
loan agreements which minimum average term is longer than 3
It is important to note that the referred rate comprises the
liquidation of exchange transactions contracted as of March 01,
2012 for the inflow of funds, including those transactions carried
out in the form of symbolic and simultaneous transactions, related
to foreign loans – which are subject to register before
the Brazilian Central Bank ("BACEN") –
contracted directly or through the issuance of bonds/notes
It is relevant to point out that the IOF/FX shall be levied at
the 6% rate plus interest and penalties in case of earlier
liquidation (partially or totally) that implicates in the non
compliance with the minimum average term set forth by the new
rules. Likewise, certain clauses (put/call) that enable the
anticipated liquidation in a period lower than 3 years for debt
bonds/notes issued abroad shall be carefully reviewed, due to the
possibility of such transactions being taxed by the IOF/FX at
a 6% rate.
Furthermore, Decree Nr. 7,683/12 expressly sets forth that the
foreign exchange transactions, including symbolic and simultaneous
transactions, carried out by foreign investors in connection with
investments in Brazilian Depositary Receipts ("BDR"),
under the conditions established by the Brazilian Securities
Commission ("CVM"), are subject to IOF/FX at a zero
At this point, although foreign exchange transactions for the
acquisition of BDRs through transactions carried out within stock
exchange were already subject to IOF/FX at a zero percent rate, the
Decree Nr. 7,683/12 expressly clarifies that this rate is
invariably applicable to the exchange transactions related to any
acquisition of BDR by foreign investors, regardless of the trading
environment in which the transactions are performed (achieving,
this way, the acquisition of BDRs in initial public offerings which
are only registered before the stock exchange).
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guide to the subject matter. Specialist advice should be sought
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