Tax News – Decree 8,426/2015 – Reestablishes the levy of PIS/PASEP and COFINS over financial income
On April 1st, 2015, Decree 8,426/2015 (published in the special edition of the Official Gazette circulated on April 2nd, 2015) reestablished the levy of PIS/PASEP and COFINS on financial revenues obtained by companies subject to the PIS and COFINS non-cumulative regime, at the rates of 0.65% and 4%, respectively.
Important to mention that:
The restoration of applicable rates described above should be viewed as a partial change, since the current legislation allows PIS/PASEP and COFINS to be levied at maximum rates of 1.65% and 7.6%, respectively;
The levy of PIS/PASEP and COFINS also applies to revenues derived from hedge operations;
The new rates above should apply even if the company has only part of its revenues subject to the PIS/COFINS non-cumulative regime;
Despite the change above, interest on net equity (INE) should continue to be taxed by PIS/PASEP and COFINS at the rates of 1.65% and 7.6%, respectively.
The new rates of PIS/PASEP and COFINS over financial income shall be enforceable as of July 1st, 2015.
It is our view that the entry into force of Decree 8,426/2015 may give rise to new discussions regarding PIS and COFINS tax credits on financial expenses, as well as on the concept of financial revenue.
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