Originally published in the April 19 edition of World Tax Daily (Copyrights Tax Analysts)
Brazil’s Federal Revenue Department on April 7 published in the official gazette Normative Instruction No. 1,022/2010, which consolidates regulations on the taxation of investments in Brazilian capital and financial markets by both resident and nonresident investors.
The instruction contains 77 articles dealing with the taxation of income and gains derived from financial and capital markets. It consolidates regulations in place since 2001 and includes all the major changes made to the investment tax regime in the past few years. Among the topics it addresses are:
- the taxation of resident investors’ income from investment funds in general;
- the taxation of resident investors’ income from investment funds that are subject to specific rules or tax regimes;
- the taxation of resident investors’ income from fixed and variable income investments in bonds and securities; and
- the taxation of nonresident investors’ income from fixed and variable income investments in bonds and securities and investment funds, including those located in low-tax jurisdictions.
The instruction clarifies the confusing regulations on investment taxation by including in one regulation all the tax aspects of investments in Brazilian financial and capital markets. Effective April 7, it also revokes, in part or in full, more than 10 previous investment tax regulations.
David Roberto R. Soares da Silva