Brazil: Report of tax developments for financial, insurance, real estate sectors

KPMG report that describes recent tax developments

Financial, insurance, real estate sectors

The KPMG member firm in Brazil prepared a report that describes recent tax developments that may affect companies in the financial, insurance, and real estate sectors.

The recent tax developments include:

  • Medida Provisória (MP)* 1,128 (5 July 2022)—New tax treatment applicable to losses incurred in the receipt of credits from financial institutions and other institutions authorized by the Central Bank of Brazil. The new provisions do not apply to consortium administrators and payment institutions. The purpose of the measure is to bring tax and accounting standards closer together, with a view to reducing “weaknesses” resulting from deferred tax assets recorded in the balance sheets of financial institutions, in connection with the implementation, in Brazil, of the new recommendations of the Basel Committee on Banking Supervision. on the capital structure and liquidity of financial institutions. These measures aim to improve prudential regulation, in line with the commitment made by the G20 member countries in December 2010.
  • Decree 11,153/22 (29 July 2022)—New rules for tax on financial transactions (Imposto Sobre Operações Financeiras—IOF) regarding foreign exchange transactions. This decree includes new language with regard to exchange operations aimed at fulfilling the obligations of credit or debit card administrators, to reflect “institutions that participate in cross-border payment arrangements as issuers of these.” It also reflects a forecast of IOF levied at the rate of 6.38% on foreign exchange transactions for the transfer abroad of funds in local currency, held in deposit accounts of non-residents in Brazil, arising from the obligations of participants in international payment related to the acquisition of goods and services and withdrawals abroad by end-users of such arrangement.
  • “Lei do Bem”—Extended the deadline for submitting the Electronic Form - FORMPD (MCTI Ordinance No. 6.148/2022) regarding the reporting of tax benefits by companies engaged in research and development (R&D) activities. Read TaxNewsFlash

Read an August 2022 report (Portuguese) prepared by the KPMG member firm in Brazil

*In Brazil, a Provisional Measure (Medida Provisória) is an “act” issued by the president, with the authority of law until later approved by Congress. The Provisional Measure is effective as from its date of publication for a 60-day period, and it may be extended for an additional 60-day period (for a total of 120 days) on a request from Congress.


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