Global

Details

  • Service: Tax, International Corporate Tax, Global Indirect Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 2/28/2013

Brazil - IOF rate on real estate investment funds 

February 28: The tax administration of Brazil issued a decree that reduces the rate of the “tax on financial operations” (Imposto sobre Operações Financeiras—IOF) for acquisitions made in connection with foreign investments in real estate investment funds.

Decree 7,894—effective 31 January 2013—establishes an IOF rate of 0% (previously 6%) for foreign investments for acquisitions of real estate investment funds (Fundo de Investimento Imoviliário) in Brazil.

Background

IOF is a federal tax is levied on credit, currency exchange, insurance and securities transactions executed through financial institutions—and includes intercompany loans. The tax also applies to gold transactions.


The rates of IOF can be increased / reduced by Brazil’s federal government by decree, with such changes being effective immediately. The tax base varies depending on the taxable event and the financial nature of the transaction.


Read a February 2013 report prepared by the KPMG member firm in Brazil: 0% IOF Tax Rate on the acquisition of real estate investment fund quotas




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