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 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

While pillar one is still alive, it will apply to a smaller group of companies, Brian Foley also told ITR
Tax teams that centralise and automate their pillar two data will have a much easier time during reporting season, says Hank Moonen, CEO of TaxModel
While GCCs drive efficiency for multinationals, they also present a host of TP risks that should be considered carefully
PwC Ireland has also called for simplifying Ireland’s tax code and a reduction in its capital gains tax in a pre-budget submission
Effective audit management requires more than documentation; it’s the way taxpayers engage that can shape audit direction, manage procedural ambiguity, and preserve options for appeal or litigation
American advisers are falling short of client expectations when it comes to providing value-added services, but remaining tight-lipped won’t make the problem go away
Awards
The Social Impact Awards unveil new categories to reflect a changing legal and social landscape
Australia's approach to tax policy has undergone significant shifts in recent years, reflecting global trends and unique domestic considerations. These developments merit close attention from tax professionals
The UK has temporarily dodged the 50% rate due to a trade deal signed with the US in May; in other news, Ryan acquired a Northern Irish tax firm
Following a $28 million funding round, Aibidia wants to ‘double down’ on the US market via partnerships with the ‘big four’, the Finnish TP tech provider’s CEO tells ITR
Gift this article