Tax News: Provisional Measure 612/2013

Published in the Official Gazette on April 4th, Provisional Measure 612 brought a significant change to the presumed profit method for the calculation of the Corporate Income Tax by Brazilian entities.

According to the new rule, companies with revenue up to R$ 72,000,000.00 (seventy two million reais) in the previous year, or R$ 6,000,000.00 (six million reais) times the number of months during which the company carried out its activities in the previous year, when less than 12 (twelve) months, may choose to calculate the Corporate Income Tax based on the presumed profit method.

Since such change will be in force only from January 2014 onwards, the existing limit of R$ 48,000,000.00 (forty eight million reais) per year (or R$ 4,000,000.00 per month in case the activities have been carried out for less than 12 months in the previous year) is still valid.

Other important changes have been introduced by Provisional Measure 612, such as:

(i) COFINS-import tax: More than 20 (twenty) NCMs have been added to the list of products that are subject to an additional 1% COFINS-import tax levied on the import, while seven products, all cooper based, have been removed from the same list;

The 1% increase to the COFINS-import tax rate (leading to a 8,6% COFINS-import tax rate) was originally introduced by law 12,715/2012

(ii) Indemnifications foreseen in Law 12,783/2013: Public concessionaries for generation, transmission and...