Brazil: Second phase of tax reform proposals are outlined

Brazil presented the initial text of the second phase of the tax reform project

Brazil presented the initial text of the second phase of the tax reform project

Officials of the Brazilian government during a 25 June 2021 press conference presented the initial text of the second phase of the tax reform project.

As proposed, the tax reform measures would affect individual tax and the taxation of legal entities and companies and would provide new rules for the taxation of profits and dividends.

For instance, one measure would affect the taxation of corporate transactions and the taxation of capital gains on indirect disposal of assets.

Another measure would affect the tax rules for real estate investment trusts (REITs or FIIs) and would repeal an exemption available for income distributed by these funds to individuals and would revise the applicable rate of tax for fixed income assets and investment funds to 15%.

Lastly, the measures would aim to unify PIS and COFINS* into a single social contribution tax referring to transactions involving goods and services.

  • PIS (programa de integração social) refers to an employees’ profit participation program, and COFINS (contribuição para o financiamento da seguridade social) refers to a social contribution program for social security financing.

Read a June 2021 report (Portuguese) prepared by the KPMG member firm in Brazil

 

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