Investment Landscape Shifts as Tax Proposals Advance in Brazil
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BRASÍLIA – Brazilian investors face a potentially altered financial landscape as key tax proposals regarding investments move forward, impacting stocks, cryptocurrencies, and real estate funds. Changes range from adjustments to capital gains taxes to teh potential reinstatement of exemptions previously on the table, creating both opportunities and challenges for investors. The proposals, currently under consideration following revisions by the Rapporteur, represent a important shift from current regulations and the initial government plan.
the evolving tax framework aims to simplify the system while increasing revenue, but the details are crucial for investors to understand. While the government initially proposed sweeping changes eliminating many exemptions, the Rapporteur’s opinion offers some concessions, notably regarding smaller investors and real estate funds.The debate centers on finding a balance between generating tax income and encouraging continued investment in the Brazilian market.
Stocks & JCP
Currently, stock sales benefit from an exemption for up to R$ 20,000 per month, with taxes of 15% for common operations and 20% for day trading. The government proposed unifying the rate to 17.5% for all operations and raising the Juros sobre Capital próprio (JCP – dividends paid from profits) tax from 15% to 20%.The Rapporteur’s opinion maintains a single rate of 17.5% for gains, including day trade, but crucially retains the exemption for quarterly sales up to R$ 60,000. The JCP tax will still increase to 20%.
Cryptocurrencies & virtual Assets
Cryptocurrency investors currently enjoy an IR exemption for sales up to R$ 35,000 per month, with gains exceeding that amount taxed progressively from 15% to 22.5%. The government initially proposed a flat 17.5% rate with no exemption. The Rapporteur’s opinion maintains a 17.5% charge, but delays its implementation until 2026. A significant provision allows for the voluntary regularization of previously undeclared assets until december 2025, with a reduced tax rate of 7.5%.
Real Estate Funds (FIIs) and Fiagros
Currently, dividends from Real Estate Funds (FIIs) and Fundos de Investimento em Participações em Empresas Agrícolas (Fiagros) are exempt from IR, provided they have at least 50 quota holders and are traded on the stock exchange, with capital gains taxed at 20%.The government proposed ending the dividend exemption, imposing a 5% tax on dividends from quotas issued after 2026, and applying a 17.5% rate to capital gains. The Rapporteur’s opinion reinstates the dividend exemption, contingent on a minimum of 100 quota holders, and maintains a 17.5% tax on capital gains. Additionally, the opinion mandates a shift from the current cash-basis accounting to the competence-basis for income distribution.
