Subtitle: Government introduces a bill to ensure tax exemption for Fiagro and FIIs from the new taxes of the tax reform.
As a business owner or manager, it is crucial to stay informed about the latest tax reforms and how they can impact your business. Recently, the Ministry of Finance introduced a bill that aims to guarantee tax exemption for Funds of Investment in Real Estate (FIIs) and Funds of Investment in Agroindustrial Chains (Fiagros) under the new taxation model of the tax reform.
The removal of the exemption for FIIs and Fiagros by the government caused concerns in the financial market and the productive sector, leading to a political movement to reverse the decision. The Parliamentary Front of Entrepreneurship (FPE) and the Parliamentary Front of Agropecuary (FPA) pressured the Executive, which now aims to circumvent the impasse through a new legislative proposal.
The bill proposes that FIIs and Fiagros be exempt from the Contribution on Goods and Services (CBS) and the Tax on Goods and Services (IBS), the new taxes that will replace the current consumption taxes. The exemption will apply to the following operations:
* Sale and transfer of real estate
* Leasing and renting
* Administration and intermediation revenues.
The bill also provides that the CBS and IBS will not be applied to financial returns, dividends, and interests on equity, as well as transactions involving securities and movable assets of the funds and their managers. The text of the bill emphasizes that, in these cases, the specific taxation regime for financial services will not be used.
The bill also allows funds of investment to use credits related to operations subject to the collection of CBS and IBS, provided that these operations are within the scope of incidence of these taxes.
The bill also adjusts the wording to avoid ambiguous interpretations of the taxation. The current text provides that the exemption occurs “when carried out by” FIIs and Fiagros, but the new wording suggests “when one of the parties is” these funds, ensuring greater legal certainty.
The veto of the exemption for FIIs and Fiagros resulted in these funds being classified as “service providers,” which would require them to collect CBS and IBS on their revenues, such as rents and real estate transactions. Before, these funds were exempt from PIS and Cofins, and the new taxation could result in increased costs for investors and tenants.
If the taxation were maintained, the managers would have to pass on the cost of the tax to the tenants, increasing the value of the rents or reducing the distribution of dividends, directly impacting the fund’s shareholders.
The text of the bill was presented at a meeting with businessmen and parliamentarians. Now, the parliamentary fronts will have a week to analyze the proposal and suggest adjustments before it is formally sent to the Chamber of Deputies.
Meanwhile, the real estate market and the agroindustrial sector are evaluating the impact of the proposal. The initial perception is that the text meets the demands of the sector, ensuring the maintenance of the exemptions and avoiding additional costs.
The progress of the bill will be closely monitored by the market, as the final decision may impact millions of investors and the dynamics of the real estate and agroindustrial sectors in Brazil.
As a business owner or manager, it is essential to stay informed about the latest tax reforms and how they can impact your business. At LICHIERI & ASSOCIADOS LTDA, we offer personalized solutions tailored to your company’s needs. Contact us today to learn more about how we can help you grow and achieve success!
