Brazil: New legislative measures regarding foreign exchange transactions

The effective date of the new foreign exchange law is one year following its enactment (i.e., 1 January 2023).

New legislative measures

Law nº 14,286 (known in English as the “foreign exchange law”) introduces changes to the Brazilian foreign exchange rules.

The new legislation´s objective is to simplify and modernize current rules considering the financial system and regarding new technologies affecting the way companies and individuals carry out foreign exchange transactions.

The legislation—published 30 December 2021—

  • Clarifies and enacts into law the possibility of settling private transactions between residents and non-residents through simultaneous / symbolic foreign exchange (FX) contracts to enable economic “netting” of credits and debts between the same resident and non-resident entities
  • Enables greater flexibility to open, maintain, and perform foreign exchange transactions with bank accounts in Brazilian currency (reais) for non-residents
  • Allows greater flexibility for exporters to use their revenues maintained in foreign bank accounts
  • Allows payments in foreign currency of liabilities registered in Brazil for certain foreign trade transactions with goods and services (as well as warranty-related financial transactions, leasing, and certain other types of export transactions)

The effective date of the new foreign exchange law is one year following its enactment (i.e., 1 January 2023).

KPMG observation

Guidance on the law’s new provisions is expected to be issued by the Brazilian central bank (BACEN). Accordingly, taxpayers need to monitor future related developments and evaluate what may be the potential implications with regard to cross-border flows.

Read a January 2022 report [PDF 298 KB] prepared by the KPMG member firm in Brazil

 

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