A “provisional measure” (MP 806) introduces changes to the taxation of certain Brazilian “closed” investment funds—that is, those funds in which investors are not allowed to redeem their quotas during the term of the investment, but only upon liquidation of the funds or through quota amortization.
MP 806 introduces withholding tax changes that affect certain closed funds. There are also new tax measures affecting private equity funds (whether they qualify as investment entities or not). The measures under MP 806 are scheduled to be effective beginning 1 January 2018, assuming MP 806 is approved by the Brazilian Congress and converted into law.
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