President Luiz Inácio Lula da Silva signed a provisional measure (MP) that intends to tax income from exclusive funds, dubbed the “MP of the Super Rich”. This MP wants to boost tax collection and fight economic disparities in the country.
Approximately 2,500 Brazilian citizens, according to federal government estimates, are involved in exclusive funds, which total approximately R$756.8 billion in assets, representing 12.3% of total funds in the country.
Through the proposal, the aim is to impose a charge of 15% to 20% on the income of these funds, in which a single shareholder holds control. The provisional measure ended up taking effect immediately after the president's signature. Despite this, for it to become permanent legislation, the measure needs to be approved by the National Congress within the next 120 days.
As an argument, the Minister of Finance, Fernando Haddad said that the measures are in line with practices adopted by developed nations in Europe, North America and South America, in addition to including countries of the Organization for Economic Cooperation and Development (OECD).
It is worth mentioning that, in addition to the MP for the super rich, the government announced a bill that proposes to tax income from investments outside the country, through structures such as trusts and offshore companies.
Despite initially being part of MP 1,172/2023, the inclusion of these fees was transferred to an independent bill after debates in the National Congress.
In view of this, the government expects to collect BRL 10 billion per year from next year, with an addition of BRL 3 billion still in 2023, with the intention of financing the expansion of tax exemptions.
The Brazilian Chamber of Deputies gave the green light to Provisional Measure (MP) 1,172/23, which adjusts the national minimum wage to R$ 1,320 and modifies the Income Tax (IR) exemption table. The measure has been in the works since May 1 of this year, awaiting only legislative approval to become a permanent law.
Approval took place on Wednesday night (23), and now the text will be forwarded to the Federal Senate for analysis. The MP's rapporteur, deputy Merlong Solano (PT-PI), added a policy to value the minimum wage to the text. This policy, which will come into force in 2024, links the real increase in the minimum wage to the positive variation in the Gross Domestic Product (GDP) of the two previous years.
The MP also brings significant changes to the Individual Income Tax (IRPF) table. With the new rule, individuals with a monthly income of up to R$2,640 will be exempt from paying the tax. Previously, the exemption applied to those who earned up to R$ 1,903.98 per month.
The State Treasury Department of São Paulo has simplified the tax obligations of e-commerce companies, such as Amazon and other giants in the field.
As of 08/22, the taxpayer will be able to operate as a retail establishment and as a logistics operator using a single National Register of Legal Entities (CNPJ) and the same state registration. Before, it was necessary to have four documents, two for each type of operation.
Another change involves the stock of companies. According to the new norm, products from logistics operators and third parties may be stored on the same shelves, within the distribution centers, and may be shipped in the same packages when purchased together by customers.
The Senate approved a draft legislative decree that endorses the Social Security agreement signed between Brazil and India. The text, which regulates the access of workers from one country and who live in the other to the local social security system, was signed in New Delhi, on January 25, 2020. PDL 215/2021 was reported by Senator Mara Gabrilli (PSD-SP) . The project now goes to enactment.
With the agreement, the contribution periods in the two systems can be added, facilitating compliance with the minimum terms for obtaining retirement and other benefits. Each system will pay the beneficiary an amount in its own currency equivalent to the contribution period made in the respective country.
The document also establishes, among other points, the rules for aggregating coverage periods and calculating benefits, the exchange of information, the granting of disability benefits, the confidentiality of personal data exchanged, the exchange of statistics and the resolution of conflicts.
Bill (PL) No. 2724/2022, authored by Senator Carlos Portinho (PL/RJ), called “Legal Framework for Stock Options”, was approved on August 22, 2023 by the Economic Affairs Committee ( CAE) of the Federal Senate. The project will be forwarded directly to the Chamber of Deputies, eliminating the plenary stage, as it is a project initiated in the Senate itself.
The bill brings important advances in reducing the tax risk and promoting greater legal certainty, by defining the commercial nature of stock option plans (or quotas), expressly ruling out their incorporation into the employment contract and exempting them from incidence of labor and social security charges.
In short, the bill grants commercial treatment to stock option plans (or quotas), provided that they meet certain minimum conditions, namely: existence of burden in exercising the options, a minimum period of 12 months for the effective exercise of options (vesting) and a minimum trading restriction period of 12 months (lock-up) counted from the acquisition of shares (unless otherwise determined by the company).
The wording of the project grants ample freedom for the parties to define the exercise price of the options. However, as a principle for applying favorable tax treatment, there must be onerous costs for the participant (that is, an effective burden on the acquisition of shares), despite the possibility of establishing a lock-up period other than the general rule of 12 months. There is no provision for reducing the minimum vesting period of 12 months, although it would be convenient for the PL to make this rule more flexible in the context of liquidity events in which the exercise of options and the sale of shares must occur simultaneously, for example, in IPOs.
