Material changes to PIS/COFINS on Finance Income
Uncertainty arose after the PIS/PASEP and COFINS taxes were imposed at the rates of 0.65% and 4% on finance income obtained by companies subject to the noncumulative taxation basis, as introduced respectively by Decree 8426/2015.
Decree 8451 was recently published on May 19, 2015 (published in the extra edition of Diário Oficial da União (official government press) on May 20, 2015), which provided further clarification about the matter.
This decree amended Decree 8426/15 in order to maintain a rate of zero percent for these taxes in the following situations:
This new provision also regulated article 30 (5) of Provisional Measure 2158-35/2001 which had required the Executive Branch to define the high oscillation in exchange rates necessary to permit a change in the scheme adopted to recognize exchange variance, for the purpose of determining the calculation bases for income tax, social contributions on net income, PIS/PASEP and COFINS.
This provision establishes that high oscillation in exchange rates occurs when the sale price of the US dollar determined by the Brazilian Central Bank appreciates or depreciates by more than 10% in a given calendar month.
We emphasize that:
The amendments addressed by Decree 8426/15 are effective from July 01, 2015.
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