26/09/2011 em Imprensa
Fonte: Tax Analysts
by Rubens Velloza and Ramon Tomazela
Brazil has established new rules for the financial transactions tax (IOF) as it applies to bonds and securities transactions (IOF-TVM) levied on derivatives contracts.
Decree 7,563/11 of September 15 amends Decree 6,306/07 (Dec. 14, 2007), or RIOF, which consolidates and regulates the general IOF rules. The amendments entered into force on September 16, the date of publication in the official gazette. (For prior coverage of previous amendments to the IOF rules, see Doc 2011-11583 or 2011WTD 104-7.)
Generally, Decree 7,563/11 maintains the applicability of the IOF-TVM at a 1
percent rate upon the purchase, sale, or maturity of derivatives contracts. However, it establishes that the only derivatives contracts subject to the IOF-TVM are:
According to the new rules, the following amounts can be deducted from the daily calculated tax base:
business day; and
Under the terms of the new rules, the tax basis must be determined in U.S. dollars and converted into the national currency at the closing exchange rate published by the Central Bank of Brazil (PTAX).
Decree 7,563/11 also sets forth the possibility of transferring the liability for the determination and payment of the IOF-TVM in the following cases:
contracts do not have the information necessary for calculating the tax basis,
including information from other entities authorized to register those contracts; or
In those cases, the taxpayer resident or domiciled in Brazil, the legal representative of the taxpayer resident or domiciled abroad, or the relevant investment fund/club manager will be responsible for determining and paying the IOF/TVM.
Decree 7,563/11 also provides for the application of a zero rate IOF-TVM for transactions with financial derivatives contracts that are not carried out in Brazil or that do not result in an increase of the short foreign exchange exposure or a reduction of the long foreign exchange exposure.
The new rules maintain the 1 percent IOF-TVM tax rate applicable to derivatives, which will be levied on the adjusted notional value of financial derivatives contracts (tax basis) upon the purchase, sale, or maturity of those contracts. The rules also maintain that the holder of the derivatives contracts is the IOF-TVM taxpayer and the entities or institutions authorized to record those contracts are the tax collector agents.
For purposes of the levy of the IOF-TVM applicable to derivatives, Decree 7,563/11 also establishes the following concepts.
Adjusted Notional Value
The reference value of the contract (notional value) multiplied by the price variation of the derivative in relation to the price variation of the relevant foreign currency. In the case of partial purchase, sale, or maturity, the adjusted notional value will be determined proportionally.
Short Foreign Exchange Exposure
The sum of the adjusted notional value of the financial derivatives contracts that result in gains when there is an appreciation of the national currency in relation to the foreign currency, or in loss when there is a depreciation of the national currency in relation to the relevant foreign currency.
Long Foreign Exchange Exposure
The sum of the adjusted notional value of the financial derivatives contracts that result in loss when there is an appreciation of the national currency in relation to the foreign currency, or gains when there is a depreciation of the national currency in relation to the relevant foreign currency.
Net Short Foreign Exchange Exposure
The maximum value between zero and the difference between the short foreign exchange exposure and the long foreign exchange exposure.
Net Long Foreign Exchange Long Exposure
The maximum value between zero and the difference between the long foreign exchange exposure and the short foreign exchange exposure.
Adjusted Net Foreign Exchange Long Exposure
The maximum value between zero and the result of the difference between the long foreign exchange exposure plus $10 million and the short foreign exchange exposure.
Financial Derivatives Contract
A contract whose object relies on the exchange rate of a foreign currency in relation to the national currency, or on the interest rate associated with a foreign currency in relation to the national currency.
Date of Purchase, Sale, or Maturity
Date on which the foreign exchange exposure of the financial derivatives contract is (fully of partially) initiated or terminated by the establishment of the parameters that will guide the determination of the settlement value of the relevant contract.
Decree 7,563/2011 also repeals:
Rubens Velloza, partner, and Ramon Tomazela, associate, Velloza & Girotto Advogados Associados, São Paulo
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