Brazil Removes Tax on Certain Foreign Exchange Transactions Related to the Brazilian Financial and Capital Markets: Nair & Co.

SUNNYVALE, Calif.--(BUSINESS WIRE)--The Brazilian Government recently announced new amendments to taxes on financial transaction regulations, which includes the reduction of tax on foreign exchange transactions (Impostosobre Operacoes Financeiras – IOF) related to the inflow of resources within Brazil from 2% to zero. The rates are effective as of December 2, 2011.

Zero tax is applicable to the following financial transactions within Brazil:

• Investment in the stock exchange or futures and commodities exchange markets (with the exception of derivative transactions entailing pre-fixed earnings);
• Acquisition of publicly offered shares or subscription of shares provided that the issuing companies are registered with the stock exchange market for negotiation of shares;
• Acquisition of Private Equity Fund quotas or funds that invest in their quotas incorporated as per the Securities Exchange Commission (Comissao de Valores Mobiliarios – CVM) rules;
• Liquidation of simultaneous exchange transactions undertaken to bring funds into Brazil for investment in shares that are negotiated within the stock exchange market by way of cancellation of depositary receipts;

Read more at http://www.nair-co.com/Brazil-tax-amendments.aspx

All kinds of credit transactions involving individual borrowers, including transactions related to concession of lines of credit and financed acquisition of non-residential real estate are subject to decreased IOF tax rates of 0.0062% per day (previously 0.0082%). This is effective as of December 3, 2011.

Read more at http://www.nair-co.com/Brazil-tax-amendments.aspx