Trust regulation advances
The bill that creates the figure of the 'trust' in Brazil was approved this month in the Chamber of Deputies - a first step towards regulating a very common instrument abroad and which brings clear benefits to family estate planning. PL #4768 of 2020 now goes to the Senate, where the vote should take place in the coming months.
Basically, a 'trust' is an instrument that allows an institution (the grantor) to transfer part or all of its assets to an administrator (the trustee), usually financial institutions such as family offices. The Bill under discussion in Congress establishes all the rules on how a trust should be created in Brazil and how the instrument will work. The Bill deals with all trust regulation, except for the most important part, which is taxation.
The taxation of trusts established abroad has been the center of controversy since 2020, since the Federal Revenue understands that the resources transferred by the trustee to the beneficiary are “income” (subject to the 27% Income Tax) – and not “donations”, which are taxed by the ITCMD, with a rate of 4% in São Paulo.
As the Bill under discussion does not regulate taxation, it is believed that the most likely is that the Federal Revenue Service of Brazil will tax trusts established in Brazil in the same way as it has done with trusts abroad. In other words: continue charging income tax on all transfers made to beneficiaries.
Central Bank of Brazil raises Selic rate to 13.75% per year; the highest level in four years
The Monetary Policy Committee (Copom) raised the Selic rate, the economy's basic interest rate, from 13.25% to 13.75% per year. The decision was expected by financial analysts.
The rate is at the highest level since January 2017, when it was also at 13.75% per year. This was the 12th consecutive readjustment in the Selic rate.
Once again, the Central Bank (BC) raised the rate by 0.5 point. In a statement, the Copom informed that the increase is due to the risks of inflation being above expectations. The text, however, said that the group should reduce the pace of increases, raising the rate by 0.25 point at the next meeting, at the end of September.
Digital SIM is sanctioned and should benefit 4.5 million entrepreneurs
The federal government sanctioned Law #14.438/2022, which creates the Digital Microcredit Simplification Program for Entrepreneurs (SIM Digital). Provisional Measure 1107/2022 had already been approved by the House and Senate and was awaiting presidential sanction.
In a note, the General Secretariat of the Presidency of the Republic highlighted that the project “aims to create mechanisms to stimulate popular entrepreneurship and the formalization of small businesses through the constitution of credit guarantee instruments”.
The program's microcredit operations will have, in addition to the reduced interest rate, a maximum term of 24 months. The program establishes a credit line of R$1,500 for people who carry out urban and rural productive activities and R$4,500 for individual microentrepreneurs (MEI).
Central Bank of Brazil to launch platform to concentrate Pix, Real Digital and Open Finance
The Central Bankof Brazil (BCB) recently announced that there will be news in financial services. According to the municipality, the idea is to bring more digitalization and modernization to the means of payment, as was proposed with Pix, Open Banking, Open Finance and even with the study of Real Digital.
For this, the BCB intends to offer all these services on a single platform by 2024. Specialists believe that this integration will be a major advance in the Brazilian financial system.
The BCB says that the idea is, in addition to facilitating the use of services, to allow personalized offers and better discounts for customers. The project will also allow users to optimize their time with all bank accounts, fintechs or cooperatives in a single system. Among the advantages, you will also be able to make instant international payments.
New treaty to avoid double taxation signed between Brazil and Colombia
After negotiations between the Brazilian Federal Revenue Service and the Dirección de Impuestos y Aduanas Nacionales, representatives from Brazil and Colombia signed the agreement to avoid double taxation and prevent tax evasion in Brasília on August 5th. Although the agreement needs to be ratified internally in both countries to enter into force, the initiative represents a commitment to boost trade relations between the two countries, considering the estimated doubling of bilateral trade as a result of the agreement.
Unlike other agreements entered into by Brazil, technical services and technical assistance will be treated differently from royalties, generating more precision in the application of the agreement.
Overall, the agreement is in line with the standards of the Organization for Economic Cooperation and Development (OECD) and represents the Brazilian and Colombian commitment to action plans to combat tax base erosion and transfer profits to jurisdictions with more favorable tax treatment (BEPS).
