Law No. 12,766/12 - Amendments To Tax Legislation

Law no. 12, 766 was published on December 28, 2012. Subject matter of conversion of Provisional Measure ("MP") no. 575/12 into Law, it brings a number of changes related to the tax legislation, among other provisions.

As there are several measures brought by this Law, we will deal with the main tax changes according to its respective law of origin, as follows: ·

Amendment to Law no. 11,079, dated December 30, 2004, which created general rules for public tenders and the entering into public and private partnerships within the Public Administration With the enactment of MP no. 575/12, converted into Law no. 12,766/12, the amount of fund contribution made in favor of the private partner for the execution of constructions or the acquisition of 'reversible assets' may be excluded from the determination of the net income and from the tax basis of the Contributions to the Social Security Funding ("COFINS"), to the Employee Profit Sharing Program ("PIS"), and the Contribution on the Net Income ("CSLL").

In this context, the portion of fund contribution excluded pursuant to the above proceedings must only be computed in the determination of the net income and in the tax basis of the COFINS, PIS, and CSLL in the proportion in which the cost for executing the constructions and acquiring reversible assets is realized, including through depreciation or end of concession.

Amendment to Law no. 10,833, dated December 29, 2003, which deals with the Contribution to the Social Security Funding ("COFINS") Another change created by Law no. 12,766/12, with effects coming into force as of Jan. 1, 2013, establishes that the revenues deriving from the trade of crushed stone, sand for civil construction, and crushed stone sand will be subject to the COFINS' cumulative system.

It is of note that this taxing system had already been created, for the purpose of the Contribution to the PIS, by article 6 of Law no. 12,693/121.

Amendment to Law no. 9,430, of December 27, 1996, which deals with the federal tax legislation, the contributions for the social security, the administrative consultation process, and other provisions. Law no. 12,766/12 also brought important changes regarding the transfer pricing rules created by Law no. 9,430/96, specifically as to the deductibility of expenses with interest2, establishing that the interest paid or credited to legal entities will only be deductible for the purpose of determining the taxable income up to the amount that does not...