Decree Nr. 7.894, dated January 30, 2013, was published
yesterday amending the Regulation of the Tax on Financial
Transactions (Decree No. 6306 of 14 December 2007), concerning in
particular the Tax on Foreign Exchange Transactions ("IOF
/FX") levied upon the inflow of funds in Brazil.
In particular, paragraph 3 was added to Article 15-A, in order to
clarify that the provisions relating to exchange transactions
carried out for the inflow of funds by foreign investors to invest
in variable income assets by means of a transaction carried
out in the stock exchange or futures and commodities exchange
(section XIII of Article 15-A), also apply, as of January 31,
2013, to transactions related to the purchase of Real Estate
Investment Fund quotas ("FII").
In this sense, the new provision granted to the inflow of funds
for the acquisition of FII quotas through the stock exchange, the
same treatment established to the purchase of variable income
assets in the same environment, which are currently subject to a
zero rate of IOF/FX. Therefore, the new wording settles the doubts
on whether or not the investments in FII quotas could be
characterized as an investment in variable income assets, for the
purposes of application of the 0% IOF/FX rate.
On the other hand, while the exact extent of the new rule may give
rise to differing interpretations, we consider that the reduced
rate do not apply to private subscriptions or acquisitions of
quotas in the over-the-counter markets (whether organized or
not).
Finally, even though the new rule enters in force as of January
31, 2013, there are arguments to support the same treatment even
for previous transactions that have been effectively carried out in
the stock exchange, provided that, given the particular
characteristics of each fund, there is enough evidence to sustain,
the characterization as variable income investment.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.