In August, the Federal Senate Foreign Relations Committee (FRC) approved Bill 215/2018 presented by Senator Jader Barbalho (MDB-PA), which imposes the collection of income tax on remittances of profits and dividends to individuals and corporations resident or domiciled abroad. Tax rates range from 15% to 25% for remittances to tax havens or countries with a privileged tax regime.
Under the project, only remittances of profits and dividends to countries that adopt the same exemption policy in relation to Brazil will not be taxed.
If the bill is fully approved, the Government estimates an increase in revenues of more than BRL 8 billion, in the first year only. The proceeds will go to states, municipalities, social, educational and public health programs.
Currently, exemption from tax on such remittances encourages foreign companies to transfer funds to their overseas headquarters, without any advantage to the national economy. On the other hand, according to Bruno Zaroni, a partner at Zaroni Advogados, “the new measure may imply a reduction in foreign investments in the country, as they become more costly with the new taxation”, he says.