By Guilherme Martins and João Pedro Riccioppo Cerqueira Gimenes

Last week, the Chamber of Deputies approved Bill (PL) No. 4,173/2023, which regulates and establishes new rules for the taxation of investments held by individuals abroad, including through offshore companies, trusts and investments in cryptocurrencies (“virtual assets”). As expected, the text of the Bill incorporated several provisions of Provisional Measure (MP) No. 1,184/23, published at the end of August 2023.

The new rules will apply to any financial transactions carried out abroad, including: virtual assets and portfolios, investment fund shares, fixed and variable income securities, current accounts and credit transactions.

The text of the Bill also brought provisions and negotiations on: (i) compensation of losses by individuals, (ii) end of the deferral provided for profits of subsidiaries abroad, (iii) updating of assets and rights held abroad by individuals, (iv) trust, (v) “come-cotas” (periodic taxation), (vi) taxation of inventory, (vii) corporate events of funds (merger, spin-off, incorporation or transformation), (viii) funds of funds, (ix) FII and FIAGRO, and (x) concept of investment entity and specific regime for FIP, FIDC, FIA and ETF.

In general, the grounds for such changes, according to the Ministry of Finance itself, consist of both bringing the rules for closed-end funds closer to those for other financial investments and Brazilian tax rules closer to the standard adopted by the OECD.

The bill now goes to the Federal Senate for consideration and approval, which will have 45 days to analyze and approve the text. After that, if approved, it will be forwarded to the President for sanction.
Given the many relevant changes on the subject, our team will closely monitor the progress of the Bill and is available to provide any clarifications.