Tax News - Decree 8451/2015

Tax News - Decree 8451/2015

Material changes to PIS/COFINS on Finance Income


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Brazilian Healthcare

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:


  • Monetary variance caused by exchange rates on exported goods and services;
  • Monetary variance caused by exchange rates on transactions undertaken by a company, including loans and financing.
  • Hedge transactions, especially when the contract is related to the company's operations and intended to hedge the company's receivables or payables.


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 variance addressed in this Decree will be determined by comparing the dollar rates on the first and last day of the month for which rates are published by the Brazilian Central Bank.
  • In event the high oscillation specified in MP 2158-35/01 is confirmed, the following month it is possible to change the scheme for recognizing monetary variance on the taxpayer's credit receivables and obligations, as stated in the act published by the federal tax authorities.
  • The new scheme adopted will apply to the entire calendar year, for each month in which high oscillation occurs, thereby permitting a single amendment to the scheme.
  • For such events arising between January and May 2015, this scheme can be changed in the month of June 2015.


The amendments addressed by Decree 8426/15 are effective from July 01, 2015.

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