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Decree Nr. 7,751, dated June 13, 2012, was published today
amending certain rules of the Tax on Financial Transactions
Regulation, concerning the tax on foreign exchange transactions
("IOF/FX") on the inflow of funds in Brazil raised
through foreign loans.
In this sense, the minimum average term of foreign loans subject
to the IOF/FX at a 6% rate, was decreased from 1,800 days (i.e.
five years) to 720 days (i.e. two years). Therefore, with the new
rules, the 0%IOF/FX rate is now applicable to foreign loan with
minimum average term greater than 720 days.
It is important to note that the new provisions are applicable
to the liquidation of exchange transactions contracted as of June
14, 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 abroad.
The outbound flows connected to such transactions (repayment of
principal and payment of interests) are still subject to the 0%
rate.
Unlike the various changes on IOF/FX rates that were recently
focused on the past appreciation of the Brazilian Reais, the new
provision and the actual foreign exchange rate suggests prudential
measure to refrain an excessive depreciation of the Brazilian
currency.
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.
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Within the Program "Brasil Maior", Law no. 12,546/2011 created the Social Security Contribution on Gross Income which, until Dec. 31, 2014, and for some economic sectors, will replace the Social Security Contributions provided for in items I and III of article 22 of Law no. 8,2 12/91, calculated, in turn, on the total remuneration paid, due, or credited to ensured employees, autonomous workers, and individual taxpayers.
As of January 1st, 2008, the general statutory corporate income tax rate is 33%. Unless otherwise provided, all Colombian and foreign entities subject to income tax in Colombia, including Colombian branches of foreign companies are subject to this 33% rate.
Panama ranks number 10 on economic freedom, from a list of
29 Latin-American economies evaluated, and this score slightly
surpasses the regional. Its economy is 65.9% free and occupies
position 47 of 157 countries on the world liberty level.
30% applicable to domiciled companies including Peruvian branches of foreign companies. Dividends and profit distribution are subject to a 4.1% withholding (not applicable to non domiciled companies).
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