Brazilian Court reduces Income Tax on IPO gains
A businessman obtained a decision in the Federal Regional Court (TRF) of the 3rd Region, based in São Paulo, to pay a fixed rate of 15% of Income Tax on gains obtained in an initial public offering (IPO). This is the first court decision of the second instance in favor of the tax thesis that emerged with the wave of IPO proceedings in the last two years.
In court, taxpayers defend the application of article 2, paragraph 2, of Law No. 11,033, of 2004. The device establishes the application of a fixed rate of 15% "to net gains earned in operations carried out on stock exchanges, commodities, of futures, and the like”.
The topic has gained importance due to the growth in the number of initial public offerings of shares in recent years. In 2021, there were 46 operations, with a volume of BRL 65.6 billion. In the previous year, 28, for a total of R$ 43.9 billion. A leap compared to 2019, when only five operations were carried out, with a total volume of BRL 9.8 billion.
The thesis is of interest not only to Brazilian individuals who seek the application of the fixed rate of 15% of Income Tax, but also to foreigners, individuals or legal entities, who are entitled to the IR exemption in operations on the stock exchange, but not in IPO.
Brazilian Government publishes provisional measure to regulate remote work
The Brazilian federal government presented, on March 25, two provisional measures to regulate remote work, promoting changes in meal vouchers and with actions such as the anticipation of vacations or benefits as an allowance for workers, in the event of a situation of calamity. The measures are part of the Income and Opportunity Program and, according to the government, aim to help the economy recover.
Among the innovations, according to the government, is the possibility of adopting the hybrid model and contracting with journey or production control.
According to the Secretary of Communication of the Presidency, the two Provisional Measures aim to regulate new forms of work, promote social security protection and protect workers and families in situations of public calamity.
9 million income tax returns have already been delivered to the Federal Revenue of Brazil
The Federal Revenue of Brazil reported that until the morning of March 30th it received 9,256,613 declarations of the Individual Income Tax (IRPF) 2022, calendar year 2021.
This year, the deadline for submitting the income tax return is until April 29. According to the tax authorities, around 34.1 million income tax returns submissions are expected.
Central Bank of Brazil launches open finance, with more services than open banking
The sharing of information and services between banks, called open banking, will be extended to other financial institutions, and will be called open finance. The National Monetary Council (CMN) approved on March 24, 2022, the resolution that creates a new regulatory framework for data exchange.
To consolidate the migration from open banking to open finance, the Central Bank of Brazil and the National Monetary Council (CMN) edited a joint resolution to update the nomenclature used in the current regulation. By June 30, the BCB will approve the definitive open finance governance structure.
The first step towards the implementation of open finance was announced on March 22, 2022, when the Central Bank of Brazil authorized the sharing of rural credit data. In addition to the banks that provide credit to rural producers, the exchange of information will cover sectors such as risk rating agencies, auditing companies, certifiers and the capital market.
São Paulo companies lose dispute over ICMS collection
Large companies that bought products from the Manaus Free Trade Zone will now have to discuss the cancellation of ICMS credits by the São Paulo government in court. On March 24, the Superior Chamber of the Tax and Fees Court (TIT) of São Paulo considered the tax assessments issued by the inspection to be legal.
The topic was analyzed in the so-called “thematic session”, responsible for unifying the understanding of the administrative court. The thesis signed will now be applied to all other cases on the subject brought to the TIT. Five cases were judged, involving large companies. Once the discussion in the administrative court is over, taxpayers can still appeal to the Judiciary.
For the judges, even though article 15 of Complementary Law nº 24, of 1975, expressly says that the measure does not apply to industries installed or that will be installed in the Manaus Free Trade Zone, this rule was prior to the 1988 Constitution, and then came new rules against the ICMS tax war that prohibit the granting of credits not authorized by National Council for Finance Policy (Confaz).
The theme brings great impact to automakers, electronics, soft drinks and cosmetics industries.
