Brazil: Increased tax rates on capital gains effective from January 1 2017

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2026

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Brazil: Increased tax rates on capital gains effective from January 1 2017

pereira.jpg
conomy.jpg

Alvaro Pereira

Mark Conomy

On April 29 2016, the Interpretative Declaratory Act 3/2016 (ADI 3/2016) was published, providing for the Brazilian Federal Revenue Authorities' (RFB) position that the increased progressive tax rates in relation to capital gains derived by individuals (and non-residents) should only apply from January 1 2017.

By way of background, Law 13,259/2016 was recently introduced providing that capital gains earned by individuals (and non-residents) arising on the alienation of Brazilian assets and rights of whatever nature are subject to progressive rates varying from 15% to 22.5% (depending on the amount of the gain).

Law 13,259/2016 provided that the law entered into effect from the date of publication producing effects from January 1 2016. This created some uncertainty in Brazil around the constitutionality of the particular amendments that result in an increase in tax due. ADI 3/2016 provides that the articles of Law 13,259/2016 dealing with the increase in capital gains tax rates should only be applicable from January 1 2017.

ADI 3/2016 is a welcome development, providing clarity for taxpayers in relation to the capital gains tax rates that should be applied to transactions undertaken in 2016.

Alvaro Pereira (alvaro.pereira@br.pwc.com) and Mark Conomy (conomy.mark@br.pwc.com)

PwC

Website: www.pwc.com.br

more across site & shared bottom lb ros

More from across our site

The Australian Taxation Office believes the Swedish furniture company has used TP to evade paying tax it owes
Supermarket chain Morrisons is facing a £17 million ($23 million) tax bill; in other news, Donald Trump has cut proposed tariffs
The controversial deal will allow US-parented groups to be carved out from key aspects of pillar two
Awards
ITR invites tax firms, in-house teams, and tax professionals to make submissions for the 2027 World Tax rankings and the 2026 ITR Tax Awards globally
Pillar two was ‘weakened’ when it altered from a multinational convention agreement to simply national domestic law, Federico Bertocchi also argued
Imposing the tax on virtual assets is a measure that appears to have no legal, economic or statistical basis, one expert told ITR
The EU has seemingly capitulated to the US’s ‘side-by-side’ demands. This may be a win for the US, but the uncertainty has only just begun for pillar two
The £7.4m buyout marks MHA’s latest acquisition since listing on the London Stock Exchange earlier this year
ITR’s most prolific stories of the year charted public pillar two spats, the continued fallout from the PwC Australia tax leaks scandal, and a headline tax fraud trial
The climbdowns pave the way for a side-by-side deal to be concluded this week, as per the US Treasury secretary’s expectation; in other news, Taft added a 10-partner tax team
Gift this article