Senate approves MP 627/13

In a vote this Tuesday (15) Senate approves MP 627/13 that ends the Transition Tax Regime (RTT), and changes the way of taxing the profits obtained by companies controlled abroad by Brazilian headquarters.

The Transition Tax Regime (RTT) ceases to exist, which guaranteed tax neutrality for six years during the period of adaptation of Brazilian companies to the international accounting standard (IFRS).

According to the Federal Revenue Service, this amendment aims at adapting tax legislation to corporate law, where companies must determine the calculation basis for Income Tax and Social Contribution on Net Income (CSLL), based on the corporate profit ascertained.

In the new rules approved there is the taxation of all profits of Brazilian companies abroad, and not just the part that is sent to Brazil in the form of dividends. The matter aims to resolve a judicial impasse that has been going on since 2001. The legal dispute involves the collection of the Corporate Income Tax (IRPJ), the Social Contribution on Net Income (CSLL) and the PIS / Pasep Contribution on the profits of these companies.

With approval by the Plenary, President Renan Calheiros forwarded the text of MP 627/13 for presidential sanction.