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

International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

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

Heads of tax need to push their teams forward as strategic business advisers to add value across the organisation, says Sandy Markwick
Scott Bessent reportedly felt undermined by Musk naming Gary Shapley as acting IRS commissioner; in other news, Baker Tilly will combine with a top 15 US firm
The promise of nine years’ tax certainty and a ‘rational and pragmatic’ government process makes APAs a no-brainer, Indian tax advisers tell ITR
Despite garnering significant revenues from multinationals, Italy’s digital services tax presents pressing double taxation issues, say Stefano Simontacchi and Francesco Saverio Scandone of BonelliErede
ITR’s research shows that in-house tax counsel in Asia also feel underserved by their advisers’ international networks
World Tax global head of research Jon Moore tells ITR how his team spots standout submissions, and gives early statistical insights into this year’s entries
Australia’s conservative opposition will repeal controversial tax agent reporting rules if elected in the country’s May general election
Shapley would be the fourth person to hold the job this year; in other news, UK tax advisory firm MHA raised fewer funds than expected from its London IPO
The US needs to be involved in pillar one for there to be more international acceptance of the project, Michael Masciangelo says
The UK regulator is investigating EY’s auditing of the national postal service as it relates to the high-profile Horizon scandal, which saw hundreds wrongfully convicted
Gift this article