• Service: Tax, International Corporate Tax, Global Indirect Tax
  • Type: Regulatory update
  • Date: 12/6/2011

Brazil - Tax rate reductions for excise tax, tax on financial transactions; enhanced refunds for certain manufacturing exporters  

December 6: Decrees no. 7631, no. 7632, and no. 7633, published December 1, 2011, in the official gazette (Diário Oficial da União) include amendments to the excise tax rates (IPI), to the rates of tax on financial transactions (IOF), and to the special tax refund regime (Reintegra) for exporting companies. All three decrees have an effective date of December 1, 2011.

  • Decree no. 7631 includes measures amending the Imposto sobre Produtos Industrializados (IPI) (an excise tax) rates imposed on certain industrialized products with specific energy efficiency ratings. The new rates are valid until March 31, 2012.
  • Decree no. 7632 includes provisions that amend decree no. 6306 of December 14, 2007, reducing the rate of Imposto sobre Operações Financeiras (IOF) (a financial transactions tax) applicable to consumers, and revising the IOF rate on foreign investments with respect to stocks listed on the Brazilian stock exchange (Bovespa) to zero (0%), and also reducing the IOF rate on long-term foreign bonds to zero (0%).
  • Decree no. 7633 provides a change to the special tax refund regime for exporting companies (Reintegra), allowing manufacturing exporters that meet certain criteria to recover 3% of the value of export earnings in the form of tax refunds. This measure is valid until December 31, 2012.

For text of the decrees (in Portuguese): Decrees no. 7631, no. 7632, and no. 7633