Keywords: IOF, foreign investment, real estate investment fund, exchange transactions, funds, Brazil

By means of Decree No. 13.894/13, published in the Official Gazette of 01.31.2013, the Federal Government amended Tax on Financial Operations Code (Decree 6.306/07) regarding its application on certain exchange transactions required to the inflow of funds to Brazil.

The § 3 of Article 15-A, introduced by the Decree No. 13.894/13, expressly provides that, among the exchange transactions relating to variable income investments traded in stock exchange or stock exchange futures and commodities, as regulated by the National Monetary Council, subject to the IOF at a zero rate, transactions related to purchase of quotas of real estate investment fund will also be covered.

Thus, this new rule allows foreign investors to purchase quotas of real estate investment funds traded in the stock exchanges to benefit from the zero rate of IOF, as well as any other application on variable income investments traded in the stock exchange.

Originally published February 5, 2013

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