The president’s government Luiz Inácio Lula da Silva (PT) should forward, in the coming days, to the National Congress, a bill with a series of measures to stimulate operations in the capital market. The news was anticipated by the newspaper The globe and confirmed by InfoMoneywho had access to details of the text, already forwarded by the Ministry of Finance to the Civil House.
According to a source from the economic team with knowledge of the matter, the bill, anticipated by InfoMoney in January, has neutral tax effect and mainly regulatory objectivewith changes in taxation rules for investments in the Stock Exchange, cryptoassets, ETFs (Exchange-Traded Funds, the so-called “index fund”) and even international hedge operations and non-resident investments.
The source from the economic team classifies the text as a continuation of the effort that began with the change in the taxation rules for financial investments held abroad (“offshores”) and exclusive funds − both regulated by Law No. 14,754/2023 (this, indeed, with a positive fiscal impact on public coffers).
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The matter also comes in the wake of the restriction on the backing of exempt financial products, such as Real Estate Receivables Certificates (CRIs), Agribusiness Receivables Certificates (CRAs), Real Estate Credit Letters (LCIs), Agribusiness Credit Letters (LCAs) and Guaranteed Real Estate Bills (LIGs) − movement anticipated by InfoMoney − and the new rules that closed the doors to the creation of exclusive family pension plans with individual balances above R$5 million.
“First we attacked the exposed fractures and now we are starting to polish them,” said this source from the economic team. The idea of the new project is to rationalize financial market taxation rules, so that investors pay taxes in a more uniform way in their operations.
Read too: Government prepares bill to consolidate rules on financial investments
O InfoMoney had access to the main points of the bill, which is awaiting evaluation by the Civil House before being forwarded to the National Congress. See the main proposed changes:
1) Deadlines and limits: With the aim of making life easier for small investors on the stock exchange and thus attracting new entrants, the project changes the period for calculating Income Tax on sales of assets, which becomes quarterly (today it is necessary to comply with bureaucracy every month), with the 15% rate being maintained for individuals residing in the country and for exempt legal entities opting for Simples Nacional. Furthermore, the limit for exempt transactions increases in the same proportion: from R$20,000 per month to R$60,000. The idea is to increase flexibility and also facilitate possible compensation for losses in operations.
The text also provides that net gains become part of the IRPJ and CSLL calculation bases for legal entities taxed based on real, presumed and arbitrated profit. There is no longer a separate collection of these gains, nor is there a limitation on the offsetting of gains and losses of the same nature.
2) Day Trade: The text reduces the Income Tax rate charged on gains from “day trade” operations − that is, negotiations, with the same securities, started and ended on the same day (learn more about the subject by clicking here) − at B3. The rate, which is currently 20% on income, would increase to 15% − the same applied to other operations involving shares on the Stock Exchange.
In the assessment of the technical area of the Treasury, the current differentiation is “anachronistic”, and the fiscal impact of the suggested change is around R$ 100 million for public coffers (which would not significantly harm the search for fiscal balance). Furthermore, the assessment is that the new taxation could increase the volume of trading in the Brazilian market, attracting new investors and increasing the liquidity of securities.
3) Loan of shares − end of “surrogacy”: The new wording also seeks to resolve interpretative doubts about the securities loan instrument and to curb a practice known in the market as “surrogacy”, in which there are assignments of assets with the aim of obtaining favored tax treatment.
In “surrogacy”, an individual investor rents shares to a fund, which receives interest on equity (JCP), benefiting from a lower IRRF rate, and returns the shares to the holder. In this way, both parties save with reduced taxation, in an alleged distortion in the market.
“The effect is twofold: it will encourage legitimate market operations, with a clear framework of what it can do. And at the same time, it will curb these surrogates in which I want to transfer to another company, fund or non-resident, which has a lower tax rate, just so we can share the tax gain”, says the Treasury source.
Furthermore, the text provides a specific rule for determining capital gains on the sale of assets lent by the borrower. In a loan, the borrower can sell the asset, bet on the price falling and buy it back at a cheaper price later. The new project allows the calculation of the gain (or loss) on the disposal of the asset to be made at the time of repurchase of the disposed asset. If there is no repurchase of the asset, the calculation of the gain (or loss) on disposal can be made when repaying the loan. It is worth noting that the change of ownership of loaned assets between lender and borrower is not subject to IR, CSLL and contributions to PIS/Pasep and Cofins.
4) “Snitch”: The text maintains the IRRF withholding rule at the rate of 0.005% in operations on the Stock Exchange − the so-called “snitch”, created by the Federal Revenue Service to be able to supervise operations at B3. The idea, however, is that, in the future, depending on the tools to automate the calculation of the IR levied on net gains on the stock exchange − in the case of the Auxiliary Program for Calculating Personal Income Tax for Variable Income Operations (ReVar ), developed by B3 with the Tax Authority), it is possible to waive this retention by the Revenue through an infra-legal act. According to a source from the Ministry of Finance, ReVar could function as something similar to a pre-filled Income Tax declaration, reducing bureaucracy for the investor.
5) Acquisition cost: The text allows the attribution, as the acquisition cost of shares traded on the Stock Exchange, of their minimum price in the 120 months prior to the operation. According to the economic team, the rule avoids the application of “zero cost” and brings legal certainty to investors who hold shares for a long period, without documentation proving the cost. The rule also makes the automated collection system viable and facilitates the work of monitoring the income tax due in operations.
6) Cryptoassets: The project seeks to “definitively” regulate virtual assets. The logic followed by the federal government’s economic team, for the purposes of collecting Income Tax, was to consider these instruments as “vehicles” and base taxation on the basis of each operation.
In other words, in cases that deal with digital assets representing financial applications, such as share tokens, the tax collection rule will be the same as that applicable to securities. If the cryptoactive is not related to financial assets, such as NFTs, the rule is the same as that adopted for capital gains. In the case of Bitcoin, the trend is an application similar to that of foreign exchange operations in the financial market.
7) ETFs: The new wording meets market demand and seeks to improve the way the Market Index Fund portfolio is calculated. The portfolio’s average term is now calculated based on a simple average of 60 counting from the last business day immediately prior to the distribution of values by the fund, and no longer on a fixed date. In this way, the effect of natural market volatility on the tax calculation is reduced.
8) GO to the source: The text exempts banks, brokers, distributors, insurance companies and other legal entities in the financial sector from IRRF withholding tax and includes factoring companies and securitization companies in this list of legal entities. Stock, commodity and futures exchanges and settlement and clearing entities, which are responsible for market infrastructures, are also exempt.
The federal government’s economic team believes that, in this way, the possibilities for structuring products should increase, without any change in the final tax burden to which the sector is subject.
In conversation with the InfoMoneya source from the economic team explained that maintaining the income tax withholding rule for financial intermediation companies affects the dynamism of the market, as it compromises cash that could be used in new operations.
9) Non-resident investor: The text also regulates the tax treatment applicable to foreign investors in the financial and capital markets, with specific rules for each type of investment. The income tax exemption of investors residing or domiciled abroad on net gains obtained from the sale of shares and other financial assets on the stock market is preserved, as long as they invest in the country in accordance with determinations of regulatory bodies. Investors also cannot be residents or domiciled in tax-favored jurisdictions.
Issues faced in the capital market in the past are also resolved, such as the inclusion of a country on the list of tax havens. In other words, if a certain jurisdiction becomes considered a tax haven, the exemption for applications made in the period prior to the change in status is preserved. Another novelty in this case was the inclusion, in the definition of tax havens, of countries that oppose secrecy to information, following the international trend of demanding more transparency.
10) International hedge: The text makes derivative contracts viable for the purpose of protecting price, index and currency risks (hedge) abroad by Brazilian companies. In international hedging, losses are deductible when calculating IRPJ and CSLL and gains are remitted at a zero IRRF rate. Previously, these operations were required to be carried out on an exchange abroad; Now, the same tax treatment is applied to contracts that are traded on the over-the-counter market, as long as they are registered and priced at market prices.
A source from the economic team cited as an example the fact that, under the current rule, an exporting company that hedges the price of certain commodities could not count on the benefit (which scared away companies), since some movements needed to be made abroad in operations bilateral.
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