Brazil Tax Update: Minimum Average Term Further Reduced for Certain Financial Transactions

PRLog (Press Release) - Jan. 8, 2013 - Brazil makes further amendment to the provisions governing tax on financial operations (Imposto sobre Operações Financeiras – IOF) with the publication of Decree No. 7,853 which reduces the minimum average term for certain financial transactions with effect from December 5, 2012.

Direct loan and bond issuance transactions in the international market will be charged IOF at six percent if such transactions – are contracted from December 5, 2012 and have a minimum average term of up to 360 days. The revised average term will also apply to transactions carried out via simultaneous foreign exchange transactions.

Earlier, all transactions with a minimum average term of up to 720 days were charged IOF at six percent. For settlement of these loan transactions, however, the zero IOF rate will remain the same.

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