Decree No. 7.894/2013: Zero IOF/FX Rate on the Purchase of Real Estate Investment Fund Quotas by Non-Resident Investor
January 31, 2013
On January 31, 2013, Decree No. 7.894 of January 30, 2013 (“Decree No. 7.894/2013”) was published on the Brazilian Federal Official Gazette, adding paragraph 3 into article 15-A of Decree No. 6,306, of December 14, 2007 (“Decree No. 6.306/2007”), which regulates the Tax on Credit, Foreign Exchange (“FX”), Insurance or Bonds’ and Securities’ Transactions (“IOF”) – the “IOF Regulation” –, including (among others) its mode specifically applicable to FX transactions (“IOF/FX”).
Prior to the new rule bought about by the Decree No. 7,894/2013 (the “New Rule”), the zero IOF/FX rate granted by item XIII of article 15-A of Decree No. 6,306/2007 was only applicable to the settlement of those FX transactions hired by foreign investors, as of December 01, 2012, in connection with the inflow of funds from abroad into Brazil for the investment in variable income transactions carried out within stock exchanges or commodities and futures exchanges, as regulated by the Brazilian Monetary Council (the “CMN”), at the exception of derivative transactions that result in predetermined earnings.
Nevertheless, the rule brought about by Decree No. 7.894/2013 establishes that the rule set forth in item XIII of the heading also comprises transactions carried out, as of January 31, 2013, for the purchase of real estate investment fund quotas.
Thus, the newly created paragraph 3 has expressly included the purchase of real estate investment fund quotas (carried out as of January 31, 2013) under the scope of the IOF/FX zero rate established by item XIII of article 15-A of Decree No. 6.306/2007.
Decree No. 7.894/2013 has entered into force on the date of its publication (i.e., January, 31, 2013).
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