The Brazilian tax authorities (RFB) on April 29, 2016, issued Interpretative Declaratory Act 3/2016 (ADI 3/2016) clarifying that the new capital gains tax rates in Law No. 13,259/2016 (Law 13,259) will apply as of January 1, 2017.
Brazil on March 16, 2016, had converted Provisional Measure 692/2015 (PM 692) into Law 13,259. The law increased the capital gains tax rates applicable to individuals and non-resident entities as follows:
The law had provided that the changes would take effect January 1, 2016. However, some paragraphs addressing capital gains from transactions occurring before December 31, 2015, were removed from the final text, making it unclear whether the higher tax rates were in effect for 2016. ADI 3/2016 eliminates the uncertainty.