Provisional Measure No. 694/2015 was published on September 30th, 2015, with the purpose of changing the following tax rules:

  1. Increasing the withholding tax rate levied on the payment or credit of interest on equity from 15% (fifteen percent) to 18% (eighteen percent), as well as limiting the interest deducted to the lowest of 5% (five percent) or the Long-Term Interest Rate – TJLP;
  2. Suspending, during the calendar year of 2016, the following benefits under Law 11,196/2005 (the so-called "Lei do Bem" in Portuguese) relating to the exclusion of IRPJ and CSLL from amounts exceeding the expenses actually incurred with research and development:

    • Directly by a retained Scientific and Technological Institution or by private scientific and technological nonprofit organizations; and
    • By entities from the computing, automation and information technology industries.
  3. Raising the PIS-Import and COFINS-Import tax rates from, respectively, 0,54% (zero point fifty four percent) and 2,46% (two point forty six percent) to 1,11% (one point eleven percent) and 5,02% (five point zero two percent), from January 1st, 2016, onwards, applicable to imports of the following products:

    • Ethane, propane and butane to be used for to ethylene and propane production;
    • Petrochemical naphtha and condensed naphta for petrochemical centrals; and
    • Ethane, propane, butane, butadiene, ortho-xylene, benzene, toluene, isoprene and paraxylene, where the import is made by chemical industries.

The above mentioned rules come into force on 1st January, 2016.

Originally published 7 October 2015

Visit us at Tauil & Chequer

Founded in 2001, Tauil & Chequer Advogados is a full service law firm with approximately 90 lawyers and offices in Rio de Janeiro, São Paulo and Vitória. T&C represents local and international businesses on their domestic and cross-border activities and offers clients the full range of legal services including: corporate and M&A; debt and equity capital markets; banking and finance; employment and benefits; environmental; intellectual property; litigation and dispute resolution; restructuring, bankruptcy and insolvency; tax; and real estate. The firm has a particularly strong and longstanding presence in the energy, oil and gas and infrastructure industries as well as with pension and investment funds. In December 2009, T&C entered into an agreement to operate in association with Mayer Brown LLP and become "Tauil & Chequer Advogados in association with Mayer Brown LLP."

© Copyright 2015. Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. All rights reserved.

This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.