Brazil: Provisional Measure No. 601/12 - Amendments To Tax Legislation

Provisional Measure ("MP") no. 601 was published on December 28, 2012, amending a number of tax incentives for 2013, as well as altering and regulating on measures related to the development and industrial policy plan called "Brasil Maior" (Greater Brazil), created by the government recently.

As the mentioned MP encompasses several topics, the tax changes will be analyzed per topic, as follows:

  • Special System of Reinstatement of Tax Amounts for Exporting Companies ("REINTEGRA") – Extension of Term

REINTEGRA, created by Provisional Measure no. 540/2011 as part of the Brasil Maior plan and aimed at reinstating amounts relative to residual tax costs existing in the production chain of exporting companies, was extended until Dec. 31, 2013.

Thus, the producing entities exporting goods manufactured throughout 2013 may compute amounts with the purpose of reimbursing, partially or fully, any tax residue existing in their productive chain.

In this regard, it should be mentioned that the amount to be reimbursed to the exporting companies will be set by the Executive Branch, and may vary from 0% (zero percent) to 3% (three percent) on the revenue deriving from the export of produced goods.

  • Payroll Release – Extension of the list of sectors included

Another measure in connection with the "Brasil Maior" plan was the release of payroll granted to legal entities of specific sectors (IT, furniture, shoes, textile, and leather), through the creation of a percentage of the social security contribution on the gross revenue ("CPRB"), substituting the social security contributions established in article 22 of Law no. 8,212/91.

Along these lines, MP no. 601/2012 extended the sectors comprised by this new system, so that among the legal entities that are also to apply the new tax rate 1% (one percent) relative to the CPRB, we have retail businesses1 and companies engaged in the maintenance and repair of vessels.

Furthermore, the MP excluded international airline companies of foreign association of countries that establish, under reciprocal treatment, tax exemption of the revenues generated by Brazilian airline companies, from the CPRB benefit.

Nevertheless, the MP also altered the revenues that can be excluded from the CPRB basis, so that, in addition to the export revenues, revenues arising from the international cargo transportation may be excluded from the CPRB basis.

Thereafter, the MP set forth that in the case of hiring of companies for the performance of services related to any type of transportation2, by way of labor assignment, the hiring company must withhold 3.5% (three point five percent) of the gross value of the tax invoice or the invoice for service rendered.

It is worth noting that the rules regarding the CPRB benefit come into force as of April 1, 2013 and will be valid until Dec. 31, 2014, except for the rules related to the exclusion of revenues from the tax basis of the contributions and the exclusion of the international airline companies mentioned above, which came into force on the date MP no. 601/2012 was published, and therefore have already been producing effects since Dec. 28, 2012. ·

  • Special Tax System of Protected Assets ("RET") – Tax Rate Reduction

Law no. 10,931/2004 was amended by MP no. 601/2012 with the purpose of reducing the tax rated of the RET in real estate ventures.

Therefore, the 6% (six percent) rate applied on the monthly revenue received in each real estate venture under the RET was reduced to 4% (four percent).

Of these 4% (four percent), 1.71% (one point seven one percent) corresponds to the Contribution for the Social Security Funding ("COFINS"), 0.37% (zero point three seven percent) to the Contributions to the Employee Profit Sharing Program ("PIS") and to the Formation of the Civil Servants' Fund Program ("PASEP"), 1.26% (one point two six percent) to the Corporate Income Tax Imposto ("IRPJ"), and 0.66% (zero point six six percent) to the Social Contribution on the Net Income ("CSLL").

These changes came into force on the date of their publication and started producing effects as of January 1, 2013.

  • COFINS-Import – Alterations

Provisional Measure no. 601/2012 extended the COFINS-Import levy, at the rate of 8.6% (eight point six percent), provided by article 8, paragraph 21, of Law no. 10,865/2004, to the cases of product acquisition added to Annex I of Law no. 12,546/2011, such as copper pipes, locks, sanitary products, among others.

In addition, there was the exclusion of products related to civil construction and hospital medicine, such as, for example, iron bars and X-ray equipment, from the mentioned Annex I to Law no. 12,546/2011, which, due to this exclusion, will now have a 7.6% (seven point six percent) COFINS-Import rate.

The alteration of the COFINS-Import' rate will only come into force as of April 1, 2013.

  • WHT – Levy on certain earnings

Another change brought by MP no. 601/2012 concerns the amendment to Law no. 12.431/2011, aimed at redefining the levy events of the Withholding Income Tax ("WHT" [IRRF]) on the remittance of earnings to beneficiaries, whether individuals or legal entities.

In this regard, it was established that in addition to the earnings provided for in article 81, paragraph 2, letter "a" of Law no. 8,981/953, the following earnings will be entitled to the zero tax rate of the WHT on remittances abroad: (i) those produced by securities acquired as of January 1, 2011, of public distribution and issued by private legal entities not classified as financial institutions, and/or (ii) those earned through investment funds of credit rights formed as closed-end funds, whose creator(s) or assignor(s) of the credit right portfolio is not a financial institution.

It is worth noting that the reduction does not apply in the case of remittances to jurisdictions that do not tax income or which tax it at a maximum rate lower than twenty percent.

In addition, the tax treatment provided for in Law no. 12,431/11 for debentures issued by specific purpose companies ("SPE"), formed under a share structure, was extended to shares issued by investment funds in credit rights ("FIDC"), formed under a closedend fund structure, requiring that, as with SPEs, such FIDCs be related to the raising of funds with the view to implement investment projects in the infrastructure area, or intensive economic production in research, development, and innovation, considered a priority by the Executive Branch.

Therefore, the earnings deriving from these debentures or shares, earned by individuals or legal entities resident or domiciled in the Country are subject to the income tax charged exclusively at source, at the following rates: (i) 0% (zero percent), when earned by individuals; and (ii) 15% (fifteen percent), when earned by legal entities that are taxed based on the taxable income, presumptive income or determined by the authorities, exempted legal entity or which opted for the Federal Simplified Tax System for Small Businesses (Simples Nacional).

Still on this matter, the MP provides for a fine of 20% (twenty percent) of the amount raised by debentures or FIDC in case there is no allocation of the earnings obtained in the investment project. In this regard, the fine will be applied to the issuer of debentures in the case of FIDC.

Lastly, it is of note that the above changes come into force on the date of publication of the mentioned MP no. 601, that is, they have already been producing effects since Dec. 28, 2012.

  • COFINS – Exclusion of service remuneration related to federal collections from the tax basis

Pursuant to article 6 of the MP, legal entities integrating the Collection Network of Federal Revenues ("RARF") may exclude from the COFINS' basis the amount earned in each ascertainment period for the rendering of federal revenue collection services.

If it is not possible to exclude this amount from the COFINS's basis relative to the ascertainment period, the exceeding amount paid may be excluded from the COFINS's basis in the subsequent periods.

It should be noted that this tax benefit is still to be regulated by the Federal Revenue of Brazil ("RFB") and will come into force in January 1, 2013.


1.Department stores classified into Subclass CNAE 4713-0/01; Retail trade of construction material, classified into Subclass CNAE 4744-0/05; Retail trade of construction material in general, classified into Subclass CNAE 4744-0/99; Specialized retail trade of IT equipment and supplies, classified into Class CNAE 4751-2; Specialized retail trade of telephone and communications equipment, classified into Class CNAE 4752-1; Specialized retail trade of household appliances and audio and video equipment, classified into Class CNAE 4753-9; Retail trade of furniture, classified into Subclass CNAE 4754-7/01; Specialized retail trade of fabric and bed and bath linen, classified into Class CNAE 4755-5; Retail trade of other household articles, classified into Class CNAE 4759-8; Retail trade of books, newspapers, magazines and stationery, classified into Class CNAE 4761-0; Retail trade of records, CDs, DVDs and tapes, classified into Class CNAE 4762-8; Retail trade of toys and recreational articles, classified into Subclass CNAE 4763-6/01; Retail trade of sporting goods, classified into Subclass CNAE 4763-6/02; Retail trade de of pharmaceutical products, without the handling of prescriptions, classified into Subclass CNAE 4771-7/01; Retail trade cosmetics, toiletries, and personal hygiene, classified into Class CNAE 4772-5; Retail trade of clothing articles and accessories, classified into Class CNAE 4781-4; Retail trade of shoes and travel items, classified into Class CNAE 4782-2; Retail trade of household cleaning items, classified into Subclass CNAE 4789-0/05, and the retail trade of photographic and filming items, classified into Subclass CNAE 4789-0/08.

2. Such as companies rendering air cargo transportation services; regular air passenger transportation; maritime cargo transportation in coastal navigation; maritime passenger transportation in coastal navigation; maritime cargo transportation in long-distance navigation; maritime passenger transportation in long-distance navigation; cargo transportation by inland navigation; passenger transportation by inland navigation in regular lines; and navigation for marine and port support.

3. "Any amounts constituting remuneration of invested capital, including the one produced by variable income securities, such as interest, premiums, commissions, discounts, and profit sharing, as well as the positive results earned in fund investments and investment clubs".

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions