ANNOUNCEMENT 19 Nov 2011

In November 2011, the government of Brazil announced a rule change for commercial cross-border financial flows.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE



On 19 November 2011:

Deloitte, Brazil Tax Alert of 19 November 2009: https://www.deloitte.com/assets/Dcom-Luxembourg/Local%20Assets/Documents/Newsletters/Operational%20tax%20news/2009/lu_braziltaxalert_19112009.pdf

Decree no. 7.011 of 18 November 2009, Official Gazette of 19 November 2009, p. 1 (in Portuguese): http://pesquisa.in.gov.br/imprensa/jsp/visualiza/index.jsp?jornal=1&pagina=1&data=19/11/2009

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On 24 December 2013:

Reuters, 24 December 2013, 'Brazil removes IOF tax on depositary receipts sales': http://www.reuters.com/article/2013/12/24/brazil-stocks-tax-idUSL2N0K30Y220131224

4-traders.com, 24 December 2013, 'Brazil Cuts IOF Financial Tax on Overseas Share Issuance': http://www.4-traders.com/news/Brazil-Cuts-IOF-Financial-Tax-on-Overseas-Share-Issuance--17638921/

Brazil's Ministry of Finance news item of 24 December 2013 (in Portuguese): http://www.fazenda.gov.br/divulgacao/noticias/2013/dezembro/governo-aumenta-aliquotas-do-ipi-de-automoveis-em-janeiro

Decreto no. 8.165 of 23 December 2013, published in Official Gazette on 24 December 2013 (in Portuguese): http://www.receita.fazenda.gov.br/Legislacao/Decretos/2013/dec8165.htm


Inception date: 19 Nov 2011 | Removal date: 18 Dec 2013
Still in force

Controls on commercial transactions and investment instruments

On 19 November 2011, the Brazilian Ministry of Finance raised afinancial operations tax, also known as the IOF, of 1.5% on the issuanceof overseas depositary receipts (DR) linked to Brazilian companies. A depositary receipt is a financial instrument that may be used in anycountry to represent a foreign company's publicly traded stock. The measure, Decree no. 7.011, came into effect on 19 November 2011.
 
On 24 December 2013, the Brazilian Ministry of Finance reduced the financial operations tax, also known as the IOF, on the issuance of depositary receipts (DR) abroad from 1.5% to 0%.
 
Initially, in 2009, the Brazilian Ministry of Finance introduced the tax to lowerthe appeal of foreign funding and encourage additional listings on theBrazilian stock exchanges. The new tax reduction will facilitateBrazilian companies to seek external finance abroad. 
 
The measure,Decreto no. 8.165, came into power on 24 December 2013.

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