On April 29, 2016, Interpretative Declaratory Act RFB ("ADI") No. 03/2016 was published in the Official Gazette, where it outlined the effects of Sections 1 and 2 of Law No. 13,259/2016 which resulted from the conversion of the Law of Provisional Measure No. 692/2015. Pursuant to Section 1 of the ADI, the changes introduced in the tax legislation by Law No. 13,259/2016 will enter into force on January 1, 2017, in compliance with the provisions of Section 62, paragraph 2 of the Federal Constitution.

Consequently, it is clear that the Brazilian Internal Revenue Service understands that, in respect to the so-called "anteriority principle", the progressive rates for income tax levied on the capital gain can only apply to taxable events that occur after January 1st, 2017.

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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."

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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.