|Alvaro Pereira and Mark Conomy (pictured)|
By way of background, PIS and COFINS under the non-cumulative regime are social contributions levied on gross revenues within Brazil (subject to certain specified exemptions) at the combined rate of 9.25%. Financial revenue has been granted a 0% combined rate since April 2005.
Pursuant to the Decree 8,426/2015, the general PIS and COFINS rates on financial revenue shall increase to a combined rate of 4.65% (0.65% PIS and 4% COFINS respectively). The new rates are applicable to companies subject to the non-cumulative regime for PIS/COFINS collection.
Income from interest on net equity remains subject to PIS and COFINS at the rates of 1.65% and 7.6%, respectively.
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