Originally published in the June 2 edition of World Tax Daily (Copyrights Tax Analysts – www.taxanalysts.com)
Brazil’s Senate on May 28 approved two provisional measures that introduced changes to the special REPORTO tax regime and increased the social contribution on net income (CSL) for financial institutions.
The first was Provisional Measure 411, which was published and entered into force on December 31, 2007, and which extended until December 31, 2010, the REPORTO regime applicable to imports and local purchases of machinery and equipment destined for Brazilian ports.
Provisional Measure 411 suspended the federal excise tax (IPI), COFINS (the Contribution for the Financing of Social Security), and P.I.S. (the Program for Social Integration contribution) for domestic purchases or imports by port operators of machinery and equipment used in the loading, unloading, and movement of cargo.
The Senate made no change to the text of the measure, so it will now be sent to President Luiz Inácio Lula da Silva for his signature or veto. If approved by the president, the measure will be converted into law and will receive a new number.
The Senate also approved Provisional Measure 413, which was published and entered into force on January 3, and which increased from 9 percent to 15 percent the CSL for financial institutions.
The measure also introduced tax provisions applicable to the tourism and ethanol sectors and to taxpayers in general. The Senate made no relevant changes to the version of the measure approved by the House of Representatives on April 29, so it also will be sent to the president for his signature or veto, and will be converted into law on his approval.
David Roberto R. Soares da Silva