By Guilherme Martins and João Pedro Riccioppo Cerqueira Gimenes, with the
collaboration of Pedro Antonio GM Buzas

The Federal Government published, in the extra edition of the Official Gazette of the Union on August 28, 2023, the
Provisional Measure (“MP”) No. 1,184, which regulates taxation on mutual funds
exclusive investments located in Brazil.

The measure is part of the Ministry of Finance's intention to increase federal revenue, already
accompanied by other changes later this year – a good example is the CARF Bill No.
2,384/2023 –, with ambitious views of raising approximately R$24 billion between 2023 and 2026. Well, the aforementioned MP provides for the collection of R$15% to R$22.5% of Income Tax on income from
exclusive (or closed) funds, referred to by the Government as “super-rich” funds.

Now, in practice, taxation will occur periodically, with the income from investments
in investment funds subject to withholding income tax (IRRF) in the following
dates: (i) on the last business day of the months of May and November; or (ii) on the date of distribution of
income, amortization, redemption or sale of shares, if they occur before.

We emphasize that the new rules introduced by MP nº 1.184/2023 will only take effect from
2024 – with the exception of taxpayers who choose to anticipate payment to 2023, which
will pay a rate of 10%.

In general, the grounds for such changes, according to the Ministry of Finance itself, consist of
both in bringing the rules of closed-end funds closer to those of other financial applications and standards
Brazilian tax regulations to the standard adopted by the OECD. However, according to the media
specialized in the subject, the approval of the text, for now, encounters resistance in the Chamber of
Deputies.

During the ceremony of the aforementioned changes, President Luiz Inácio Lula da Silva also
sanctioned the new policy of minimum wage adjustments and the new exemption bracket for income tax
Income (IRPF). In addition, the Government sent to the National Congress the Bill (“PL”) that aims to
tax the capital of Brazilian residents invested in tax havens (offshores and trusts).

Our team will continue to closely monitor the development of the topic and is at your disposal.
willingness to provide any clarifications.