Brazil has reduced a financial transactions tax on currency derivatives
to zero after its currency, the real, hit four-year lows against the
dollar on Wednesday.
The measure was the second such move in a
week to dismantle currency controls as the government sounds a rapid
retreat from its earlier “currency war” against foreign capital inflows.
The
1 per cent tax, which applied to short dollar positions in the futures
market that were essentially a bet on a stronger real, was considered
one of the most onerous of Brazil’s currency controls when it was
introduced in July 2011.
Showing posts with label IOF. Show all posts
Showing posts with label IOF. Show all posts
Thursday, June 13, 2013
Wednesday, December 5, 2012
Governo reduz para um ano prazo de empréstimo externo sujeito a IOF
SÃO PAULO - O
governo reduziu para um ano o prazo dos empréstimos externos sujeitos à
alíquota de 6% do Imposto sobre Operações Financeiras (IOF). Até então,
os empréstimos com prazos de até dois anos pagavam essa alíquota.
Thursday, January 6, 2011
Brazil Sets Reserve Requirements for Currency Positions to Stem Real Rally
Monetary Policy Director Aldo Mendes. Photographer: Sebastian Bravo/Bloomberg
The new rules have the potential to reduce short positions in the dollar to $10 billion from $16.8 billion in December as banks seek to avoid paying reserve requirements on currency operations, Aldo Mendes, the central bank’s director of monetary policy told reporters in Brasilia.
Thursday, November 19, 2009
Brazil Increase of IOF ‘Should Not Be Ruled Out,’ JPMorgan Says - Bloomberg.com
Brazil Increase of IOF ‘Should Not Be Ruled Out,’ JPMorgan Says
Nov. 19 (Bloomberg) -- Brazil’s so-called IOF tax on the purchase of equity and fixed-income assets by foreigners may be expanded further to fight an appreciation in the currency, JPMorgan Chase & Co. said.
The extension of the tax to the creation of new depositary receipts, announced yesterday, shows that the IOF remains the key instrument to fight the real’s appreciation, and therefore IOF brackets that are higher or broader in scope should not be ruled out, wrote Sao Paulo-based Julio C. Callegari in a note.
To contact the reporter on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net.
Last Updated: November 19, 2009 07:31 EST"
Nov. 19 (Bloomberg) -- Brazil’s so-called IOF tax on the purchase of equity and fixed-income assets by foreigners may be expanded further to fight an appreciation in the currency, JPMorgan Chase & Co. said.
The extension of the tax to the creation of new depositary receipts, announced yesterday, shows that the IOF remains the key instrument to fight the real’s appreciation, and therefore IOF brackets that are higher or broader in scope should not be ruled out, wrote Sao Paulo-based Julio C. Callegari in a note.
To contact the reporter on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net.
Last Updated: November 19, 2009 07:31 EST"
Friday, November 13, 2009
Dollar Overwhelms Central Banks From Brazil to Korea (Update1) - Bloomberg.com
By Oliver Biggadike and Matthew Brown
Nov. 13 (Bloomberg) -- Brazil, South Korea and Russia are losing the battle among developing nations to reduce gains in their currencies and keep exports competitive as the demand for their financial assets, driven by the slumping dollar, is proving more than central banks can handle."...
‘Suffered Tremendously’
Brazil’s real is up 1.6 percent this month, even after imposing a tax in October on foreign stock and bond investments and increasing foreign reserves by $9.5 billion in October in an effort to curb the currency’s appreciation. The real has risen 33 percent this year.
“We have to be careful that our exchange rate doesn’t appreciate too much as to deindustrialize the country,” Marcos Verissimo, chief of staff at Brazil’s state development bank known as BNDES, said yesterday at a conference in Sao Paulo. “The capital goods industry has suffered tremendously.”....
“The dollar is weakening because the U.S. has the lowest short-term interest rates in the world will be the sell side of the carry trade as long as that remains true,” Chris Low, chief economist at FTN Financial in New York, wrote in a note to clients yesterday.....
‘Hard to Fight’
Brazil’s economy emerged from a recession in the second quarter, swinging to a 1.9 percent expansion after six months of contraction, a Sept. 11 report from the statistics agency showed. Six straight months of job growth, coupled with tax breaks and record low borrowing costs, pushed up consumer spending and helped Latin America’s largest economy rebound from the global financial crisis.
“I hear a lot of noise reflecting the government’s discomfort with the exchange rate, but it is hard to fight this,” said Rodrigo Azevedo, the monetary policy director of Brazil’s central bank from 2004 to 2007. “There is very little Brazil can do,” said Azevedo, who runs $1.8 billion at JGP SA in Rio de Janeiro, in an Oct. 16 interview.
To contact the reporter on this story:
Oliver Biggadike in New York at obiggadike@bloomberg.net
Matthew Brown in London at brown42@bloomberg.net
Last Updated: November 13, 2009 01:34 EST
Dollar Overwhelms Central Banks From Brazil to Korea
Nov. 13 (Bloomberg) -- Brazil, South Korea and Russia are losing the battle among developing nations to reduce gains in their currencies and keep exports competitive as the demand for their financial assets, driven by the slumping dollar, is proving more than central banks can handle."...
‘Suffered Tremendously’
Brazil’s real is up 1.6 percent this month, even after imposing a tax in October on foreign stock and bond investments and increasing foreign reserves by $9.5 billion in October in an effort to curb the currency’s appreciation. The real has risen 33 percent this year.
“We have to be careful that our exchange rate doesn’t appreciate too much as to deindustrialize the country,” Marcos Verissimo, chief of staff at Brazil’s state development bank known as BNDES, said yesterday at a conference in Sao Paulo. “The capital goods industry has suffered tremendously.”....
“The dollar is weakening because the U.S. has the lowest short-term interest rates in the world will be the sell side of the carry trade as long as that remains true,” Chris Low, chief economist at FTN Financial in New York, wrote in a note to clients yesterday.....
‘Hard to Fight’
Brazil’s economy emerged from a recession in the second quarter, swinging to a 1.9 percent expansion after six months of contraction, a Sept. 11 report from the statistics agency showed. Six straight months of job growth, coupled with tax breaks and record low borrowing costs, pushed up consumer spending and helped Latin America’s largest economy rebound from the global financial crisis.
“I hear a lot of noise reflecting the government’s discomfort with the exchange rate, but it is hard to fight this,” said Rodrigo Azevedo, the monetary policy director of Brazil’s central bank from 2004 to 2007. “There is very little Brazil can do,” said Azevedo, who runs $1.8 billion at JGP SA in Rio de Janeiro, in an Oct. 16 interview.
To contact the reporter on this story:
Oliver Biggadike in New York at obiggadike@bloomberg.net
Matthew Brown in London at brown42@bloomberg.net
Last Updated: November 13, 2009 01:34 EST
Dollar Overwhelms Central Banks From Brazil to Korea
View Waldemar Jezler's profile
Thursday, November 12, 2009
Brazil Currency Specialist to Join Finance Ministry, Valor Says
Nov. 12 (Bloomberg) -- Economist Emilio Garofalo Filho left the Brazilian central bank to work at the Finance Ministry, Valor Economico reported, without saying where it got the information.
Finance Minister Guido Mantega invited Garofalo, 56, to help design policies to contain the local currency’s appreciation against the dollar, according to the newspaper.
Calls by Bloomberg News to the Finance Ministry and the central bank weren’t answered before regular business hours.
To contact the reporter responsible for this story:
Camila Fontana in Sao Paulo at cfontana@bloomberg.net
Last Updated: November 12, 2009 04:51 EST
Brazil Currency Specialist to Join Finance Ministry, Valor Says
Finance Minister Guido Mantega invited Garofalo, 56, to help design policies to contain the local currency’s appreciation against the dollar, according to the newspaper.
Calls by Bloomberg News to the Finance Ministry and the central bank weren’t answered before regular business hours.
To contact the reporter responsible for this story:
Camila Fontana in Sao Paulo at cfontana@bloomberg.net
Last Updated: November 12, 2009 04:51 EST
Brazil Currency Specialist to Join Finance Ministry, Valor Says
Tuesday, November 10, 2009
Brazil Investigating Investment Tax Loopholes, Estado Reports
Nov. 10 (Bloomberg) -- Brazil’s Finance Ministry is investigating possible loopholes used by investors to avoid paying a new tax on foreign purchases of stocks and bonds, O Estado de Sao Paulo reported, citing an interview with a government official who declined to be identified.
The Finance Ministry is inclined to raise the tax rate from 2 percent and at the same time to eliminate the tax on purchases of stocks in initial public offerings, the person told Estado.
The Finance Ministry press office didn’t immediately return calls by Bloomberg News seeking comment.
To contact the reporter responsible for this story: Camila Fontana at cfontana@bloomberg.net
Last Updated: November 10, 2009 05:02 EST
Brazil Investigating Investment Tax Loopholes, Estado Reports - Bloomberg.com
The Finance Ministry is inclined to raise the tax rate from 2 percent and at the same time to eliminate the tax on purchases of stocks in initial public offerings, the person told Estado.
The Finance Ministry press office didn’t immediately return calls by Bloomberg News seeking comment.
To contact the reporter responsible for this story: Camila Fontana at cfontana@bloomberg.net
Last Updated: November 10, 2009 05:02 EST
Brazil Investigating Investment Tax Loopholes, Estado Reports - Bloomberg.com
Friday, November 6, 2009
Brazil May Exempt IPOs From Foreign Inflow Tax, Estado Reports
Nov. 6 (Bloomberg) -- Brazil’s Finance Minister Guido Mantega may exempt initial public offerings from a new 2 percent tax on foreign inflows while increasing the levy on other transactions, Estado reported, without saying how it got the information.
An increase in the inflow tax may be applied to other kinds of transactions in a bid to stem the real’s rally against the dollar, the Sao Paulo-based newspaper reported.
The Finance Ministry didn’t immediately return calls by Bloomberg News seeking comment.
To contact the reporter on this story: Francisco Marcelino in Sao Paulo at mdeoliveira@bloomberg.net
Last Updated: November 6, 2009 07:14 EST
Brazil May Exempt IPOs From Foreign Inflow Tax, Estado Reports - Bloomberg.com
An increase in the inflow tax may be applied to other kinds of transactions in a bid to stem the real’s rally against the dollar, the Sao Paulo-based newspaper reported.
The Finance Ministry didn’t immediately return calls by Bloomberg News seeking comment.
To contact the reporter on this story: Francisco Marcelino in Sao Paulo at mdeoliveira@bloomberg.net
Last Updated: November 6, 2009 07:14 EST
Brazil May Exempt IPOs From Foreign Inflow Tax, Estado Reports - Bloomberg.com
Thursday, November 5, 2009
Mantega Says Brazil Inflow Tax to Help Avoid ‘Bubble’
By Laura Price and Juan Pablo Spinetto
Nov. 5 (Bloomberg) -- Brazilian Finance Minister Guido Mantega said the country’s 2 percent tax on some capital inflows will help prevent the formation of an asset “bubble.” [more: Mantega Says Brazil Inflow Tax to Help Avoid ‘Bubble’]
Nov. 5 (Bloomberg) -- Brazilian Finance Minister Guido Mantega said the country’s 2 percent tax on some capital inflows will help prevent the formation of an asset “bubble.” [more: Mantega Says Brazil Inflow Tax to Help Avoid ‘Bubble’]
Brazil to Propose Measures on Exchange Rates at G20, Folha Says
By Andre Soliani
Nov. 5 (Bloomberg) -- Brazil will propose to the Group of 20 countries measures to avoid overvaluation of the Brazilian, Australian, New Zealander and South African currencies against the U.S. dollar and the Chinese yuan, Folha de Sao Paulo reported, citing Finance Minister Guido Mantega. Mantega told the Sao Paulo-based newspaper that investors are shifting money to commodity exporting economies because rich nations are paying low interest rates.
The government’s 2 percent tax on foreign purchases of fixed income securities and equities is helping contain stock and currency gains, Folha reported Mantega as saying.
To contact the reporter on this story: Andre Soliani in Brasilia at asoliani@bloomberg.net
Last Updated: November 5, 2009 07:08 EST
Brazil to Propose Measures on Exchange Rates at G20, Folha Says - Bloomberg.com
Wednesday, October 28, 2009
Itau Europa to Sell Three-Year Real-Linked Notes (Update2) - Bloomberg.com
Itau Europa to Sell Three-Year Real-Linked Notes (Update2) - Bloomberg.com:
By Camila Fontana
Oct. 28 (Bloomberg) -- Itau Unibanco Holding SA’s European unit plans to sell as much as $100 million of real-linked structured notes this week.
The unit of Brazil’s biggest non-government bank, known as Banco Itau Europa, will sell the three-year securities at an interest rate of 10.5 percent in a private placement, said Mauro Morelli, a member of the company’s executive board. The dollar- denominated notes will be linked to the real, meaning interest and principal payments will fluctuate with movements in Brazil’s currency.
Itau is tapping into demand from investors looking to buy real-based assets without having to pay a 2 percent tax Brazil implemented last week on foreigners’ purchases of stocks and fixed-income assets, Morelli said. The government imposed the tax, known as IOF, in a bid to contain a rally that has made the real the best-performing major currency this year.
“We are issuing to meet demand from investors who want exposure to the real and need an alterative to the IOF in Brazil,” Morelli said in a telephone interview from Lisbon.
To contact the reporter on this story: Camila Fontana Correa in Sao Paulo at cfontana@bloomberg.net
Last Updated: October 28, 2009 17:02 EDT"
By Camila Fontana
Oct. 28 (Bloomberg) -- Itau Unibanco Holding SA’s European unit plans to sell as much as $100 million of real-linked structured notes this week.
The unit of Brazil’s biggest non-government bank, known as Banco Itau Europa, will sell the three-year securities at an interest rate of 10.5 percent in a private placement, said Mauro Morelli, a member of the company’s executive board. The dollar- denominated notes will be linked to the real, meaning interest and principal payments will fluctuate with movements in Brazil’s currency.
Itau is tapping into demand from investors looking to buy real-based assets without having to pay a 2 percent tax Brazil implemented last week on foreigners’ purchases of stocks and fixed-income assets, Morelli said. The government imposed the tax, known as IOF, in a bid to contain a rally that has made the real the best-performing major currency this year.
“We are issuing to meet demand from investors who want exposure to the real and need an alterative to the IOF in Brazil,” Morelli said in a telephone interview from Lisbon.
To contact the reporter on this story: Camila Fontana Correa in Sao Paulo at cfontana@bloomberg.net
Last Updated: October 28, 2009 17:02 EDT"
Monday, October 26, 2009
Brazil’s Real Falls on Speculation Government May Curb Gains - Bloomberg.com
Brazil’s Real Falls on Speculation Government May Curb Gains - Bloomberg.com
By Camila Fontana
Oct. 26 (Bloomberg) -- Brazil’s real slid for the first time in four days on speculation the government may take additional steps to curb the currency’s rally.
The real dropped 1 percent to 1.7350 per U.S. dollar at 3:08 p.m. New York time, from 1.7173 on Oct. 23. The decline cut the currency’s appreciation this year to 33 percent. Last week the government imposed a 2 percent tax on foreign purchases of stocks and fixed-income securities.
“The market is wondering what the government is going to do after we break the 1.7 barrier,” said Paulo Petrassi, manager of fixed income investments at Leme Investimentos. The government may increase the tax rate on foreign inflows, he said in a phone interview from Florianopolis.
A spokeswoman from the Finance Ministry in Brasilia who declined to give her name said new measures to contain the real’s gains are not off the table, but that no announcement is imminent.
Brazilian authorities will most likely use the country’s sovereign fund to buy dollars in an effort to stop the currency from climbing even further, said Antonio Madeira, chief economist at MCM Consultores Associados in Sao Paulo.
Fixed income manager Rafael Correia of GAP Asset Management said in a phone interview from Rio de Janeiro that if the Brazilian currency reaches 1.8 per dollar, it will be a good opportunity to buy reais again.
The real opened higher and reached 1.7020 in early trading. The proximity to 1.7 prompted many local investors to buy dollars to prevent losses, said Roberto Kropp, a director at Daycoval Asset Management in an interview from Sao Paulo. The central bank bought dollars in the spot market today for 1.7059 reais each.
In the overnight interest-rates futures market, the yield on the contract due January 2011 rose four basis points, or 0.04 percentage point, to 10.28 percent, according to Bloomberg data.
To contact the reporter responsible for this story: Camila Fontana at cfontana@bloomberg.net
Last Updated: October 26, 2009 15:24 EDT"
By Camila Fontana
Oct. 26 (Bloomberg) -- Brazil’s real slid for the first time in four days on speculation the government may take additional steps to curb the currency’s rally.
The real dropped 1 percent to 1.7350 per U.S. dollar at 3:08 p.m. New York time, from 1.7173 on Oct. 23. The decline cut the currency’s appreciation this year to 33 percent. Last week the government imposed a 2 percent tax on foreign purchases of stocks and fixed-income securities.
“The market is wondering what the government is going to do after we break the 1.7 barrier,” said Paulo Petrassi, manager of fixed income investments at Leme Investimentos. The government may increase the tax rate on foreign inflows, he said in a phone interview from Florianopolis.
A spokeswoman from the Finance Ministry in Brasilia who declined to give her name said new measures to contain the real’s gains are not off the table, but that no announcement is imminent.
Brazilian authorities will most likely use the country’s sovereign fund to buy dollars in an effort to stop the currency from climbing even further, said Antonio Madeira, chief economist at MCM Consultores Associados in Sao Paulo.
Fixed income manager Rafael Correia of GAP Asset Management said in a phone interview from Rio de Janeiro that if the Brazilian currency reaches 1.8 per dollar, it will be a good opportunity to buy reais again.
The real opened higher and reached 1.7020 in early trading. The proximity to 1.7 prompted many local investors to buy dollars to prevent losses, said Roberto Kropp, a director at Daycoval Asset Management in an interview from Sao Paulo. The central bank bought dollars in the spot market today for 1.7059 reais each.
In the overnight interest-rates futures market, the yield on the contract due January 2011 rose four basis points, or 0.04 percentage point, to 10.28 percent, according to Bloomberg data.
To contact the reporter responsible for this story: Camila Fontana at cfontana@bloomberg.net
Last Updated: October 26, 2009 15:24 EDT"
Friday, October 23, 2009
IMF Official: Brazil Should Phase Out Fiscal Stimulus - WSJ.com
IMF Official: Brazil Should Phase Out Fiscal Stimulus - WSJ.com: "
OCTOBER 23, 2009, 3:20 P.M. ET
SAO PAULO (Dow Jones)-- The best way for Brazil to protect its currency from additional, and unwanted, appreciation is to phase out fiscal stimulus measures, a top International Monetary Fund official said Friday.
'Given that Brazil has already emerged from the global crisis and is growing strongly, it is now time to remove fiscal stimulus,' IMF Western Hemisphere Director Nicolas Eyzaguirre told reporters. 'If not, Brazil will face inflation and rising interest rates.'
Higher interest rates, in turn, could bring in more speculative investment from overseas, leading to persistent appreciation of the Brazilian real.
The Brazilian real has gained 35% against the U.S. dollar so far this year. The strong real has hurt exporters. It has also led to a deterioration of trade and current account balances.
Earlier Friday, the Brazilian Central Bank released September current account figures, showing a monthly deficit of $2.31 billion, up sharply from $822 million in August. Brazil's September trade surplus dwindled to $1.33 billion from $3.1 billion the previous month.
Earlier this week, the Brazilian government slapped a 2% tax on incoming foreign investments in the areas of fixed-income and stocks. The frank purpose of the measure was to reduce foreign investment inflows to halt the appreciation of the real.
Eyzaguirre said, 'We understand perfectly how a country would wish to protect itself in a situation like this. The obvious thing to do is to open your umbrella when it's raining dollars.'
But Eyzaguirre said the increased taxation alone might not be enough to halt the real's appreciation. For that reason, he recommended removal of fiscal stimulus measures.
'Brazil has created a middle class, which has stepped up consumption to the point where fiscal stimulus is no longer necessary and can be phased out,' Eyzaguirre said.
-By Tom Murphy, Dow Jones Newswires; 55-11-2847-4519; brazil@dowjones.com"
OCTOBER 23, 2009, 3:20 P.M. ET
SAO PAULO (Dow Jones)-- The best way for Brazil to protect its currency from additional, and unwanted, appreciation is to phase out fiscal stimulus measures, a top International Monetary Fund official said Friday.
'Given that Brazil has already emerged from the global crisis and is growing strongly, it is now time to remove fiscal stimulus,' IMF Western Hemisphere Director Nicolas Eyzaguirre told reporters. 'If not, Brazil will face inflation and rising interest rates.'
Higher interest rates, in turn, could bring in more speculative investment from overseas, leading to persistent appreciation of the Brazilian real.
The Brazilian real has gained 35% against the U.S. dollar so far this year. The strong real has hurt exporters. It has also led to a deterioration of trade and current account balances.
Earlier Friday, the Brazilian Central Bank released September current account figures, showing a monthly deficit of $2.31 billion, up sharply from $822 million in August. Brazil's September trade surplus dwindled to $1.33 billion from $3.1 billion the previous month.
Earlier this week, the Brazilian government slapped a 2% tax on incoming foreign investments in the areas of fixed-income and stocks. The frank purpose of the measure was to reduce foreign investment inflows to halt the appreciation of the real.
Eyzaguirre said, 'We understand perfectly how a country would wish to protect itself in a situation like this. The obvious thing to do is to open your umbrella when it's raining dollars.'
But Eyzaguirre said the increased taxation alone might not be enough to halt the real's appreciation. For that reason, he recommended removal of fiscal stimulus measures.
'Brazil has created a middle class, which has stepped up consumption to the point where fiscal stimulus is no longer necessary and can be phased out,' Eyzaguirre said.
-By Tom Murphy, Dow Jones Newswires; 55-11-2847-4519; brazil@dowjones.com"
Thursday, October 22, 2009
Brazil - A Quick Guide to the IOF Tax
IOF on Foreign Currency Inflows
Brazilian Finance Minister Guido Mantega announced last Monday that
capital inflows regarding portfolio investments and investments in local
assets will be subject to IOF taxation (at 2%, to be paid on the
settlement date of the BRL 'Reais'). This is the main channel used by
foreign investors to invest both in Equities and Fixed income in Brazil.
The IOF over FX transactions to buy any assets, through the Resolution
2689 was increased from 0% to 2%, regardless how long the investment
remains in Brazil (short or long term).
This is the first time the government imposes an IOF over investment in
equities. From March to October 2008, the IOF for fixed income was
subject to an IOF of 1.5% but for equities remained unchanged at 0%.
In other words:
- All Capital Inflows to Fixed income and Equity Investments are
subject to the IOF taxation at 2%.
- The IOF must be paid in the Foreign Exchange Transaction when
the foreign investor is Buying BRL in all transactions closed from
October 20 onward
(FX contracts closed until October 19 are exempt of the new IOF).
- The IOF tax must be applied on the gross up value, i.e. If you
traded BRL 1.000.000,00 at Bovespa so, the FX contract must be closed
for BRL 1.020.408,16 = BRL 1.000.000,00 / 0,98. Please always observe
this rule for the next FX transactions. See table below:
Amount Traded at BOVESPA
BRL 1.000.000,00
FX Amount to be Considered
BRL 1.020.408,16
IOF Tax on the FX contract
BRL 20.408,16
NET BRL Amount to be paid to local custodian
BRL 1.000.000,00
Calculation
BRL 1.000.000 (100%-2%) = Grossed up Amount = BRL 1.020.408,16 = FX
amount to be closed.
- Please take note that the event to be taxed is the FX contract and
the responsible to collect the IOF on the FX transactions is the Bank
where the FX deal is closed and not the local custodian."
Brazilian Finance Minister Guido Mantega announced last Monday that
capital inflows regarding portfolio investments and investments in local
assets will be subject to IOF taxation (at 2%, to be paid on the
settlement date of the BRL 'Reais'). This is the main channel used by
foreign investors to invest both in Equities and Fixed income in Brazil.
The IOF over FX transactions to buy any assets, through the Resolution
2689 was increased from 0% to 2%, regardless how long the investment
remains in Brazil (short or long term).
This is the first time the government imposes an IOF over investment in
equities. From March to October 2008, the IOF for fixed income was
subject to an IOF of 1.5% but for equities remained unchanged at 0%.
In other words:
- All Capital Inflows to Fixed income and Equity Investments are
subject to the IOF taxation at 2%.
- The IOF must be paid in the Foreign Exchange Transaction when
the foreign investor is Buying BRL in all transactions closed from
October 20 onward
(FX contracts closed until October 19 are exempt of the new IOF).
- The IOF tax must be applied on the gross up value, i.e. If you
traded BRL 1.000.000,00 at Bovespa so, the FX contract must be closed
for BRL 1.020.408,16 = BRL 1.000.000,00 / 0,98. Please always observe
this rule for the next FX transactions. See table below:
Amount Traded at BOVESPA
BRL 1.000.000,00
FX Amount to be Considered
BRL 1.020.408,16
IOF Tax on the FX contract
BRL 20.408,16
NET BRL Amount to be paid to local custodian
BRL 1.000.000,00
Calculation
BRL 1.000.000 (100%-2%) = Grossed up Amount = BRL 1.020.408,16 = FX
amount to be closed.
- Please take note that the event to be taxed is the FX contract and
the responsible to collect the IOF on the FX transactions is the Bank
where the FX deal is closed and not the local custodian."
Brazil May Change New Tax If It’s Ineffective, Lula Tells Folha - Bloomberg.com
Brazil May Change New Tax If It’s Ineffective, Lula Tells Folha - Bloomberg.com
By Laura Price
Oct. 22 (Bloomberg) -- Brazilian President Luiz Inacio Lula da Silva said his government is ready to change and may even drop a newly imposed tax on foreign purchases of fixed-income securities and stocks if the levy fails to curb the Brazilian currency’s gain, Folha de S. Paulo newspaper reported.
Lula also said his government will stick to a plan to tax savings accounts over 50,000 reais ($28,815), the newspaper reported. Brazil may consider different options within the plan to tax savings, Lula told the newspaper in an interview.
The president also said he ordered the country’s Finance Ministry to pay overdue tax rebates by December to help consumers, Folha reported.
To contact the reporter on this story: Laura Price in London at lprice3@bloomberg.net
Last Updated: October 22, 2009 07:23 EDT"
By Laura Price
Oct. 22 (Bloomberg) -- Brazilian President Luiz Inacio Lula da Silva said his government is ready to change and may even drop a newly imposed tax on foreign purchases of fixed-income securities and stocks if the levy fails to curb the Brazilian currency’s gain, Folha de S. Paulo newspaper reported.
Lula also said his government will stick to a plan to tax savings accounts over 50,000 reais ($28,815), the newspaper reported. Brazil may consider different options within the plan to tax savings, Lula told the newspaper in an interview.
The president also said he ordered the country’s Finance Ministry to pay overdue tax rebates by December to help consumers, Folha reported.
To contact the reporter on this story: Laura Price in London at lprice3@bloomberg.net
Last Updated: October 22, 2009 07:23 EDT"
Wednesday, October 21, 2009
BM&FBovespa to Propose Alternatives to ‘Faulty’ Tax - Bloomberg.com
By Paulo Winterstein
Oct. 21 (Bloomberg) -- BM&FBovespa SA, Latin America’s biggest exchange, plans to press the Brazilian government for alternative ways to curb gains in the currency as a tax on investments sent stocks to the biggest drop in four months.
The benchmark Bovespa index tumbled 2.9 percent yesterday after Finance Minister Guido Mantega announced a 2 percent tax on foreign purchases of fixed-income securities and equities. The levy, higher than a 1.5 percent tax scrapped a year ago that didn’t cover stocks, will hurt Brazilian investors and small- and medium-sized companies, according to Carlos Kawall, chief financial officer of Sao Paulo-based BM&FBovespa.
“We need to do everything we can from now on, talking to the government, getting support from everyone who sees that this is something that is definitely faulty and could be altered,” Kawall, a former Treasury Secretary who served under Mantega in 2006, said during a conference call yesterday.
International investors, who account for about a third of BM&FBovespa’s stock trading, will likely buy American depositary receipts, punishing smaller Brazilian companies who can’t afford the costs of listing overseas, Kawall said. The fact that money raised through ADRs is seen as direct investment and isn’t taxed, while local capital raising will be subject to the levy, is one of the “inconsistencies” in the regulation, he said."
BM&FBovespa to Propose Alternatives to ‘Faulty’ Tax - Bloomberg.com
Oct. 21 (Bloomberg) -- BM&FBovespa SA, Latin America’s biggest exchange, plans to press the Brazilian government for alternative ways to curb gains in the currency as a tax on investments sent stocks to the biggest drop in four months.
The benchmark Bovespa index tumbled 2.9 percent yesterday after Finance Minister Guido Mantega announced a 2 percent tax on foreign purchases of fixed-income securities and equities. The levy, higher than a 1.5 percent tax scrapped a year ago that didn’t cover stocks, will hurt Brazilian investors and small- and medium-sized companies, according to Carlos Kawall, chief financial officer of Sao Paulo-based BM&FBovespa.
“We need to do everything we can from now on, talking to the government, getting support from everyone who sees that this is something that is definitely faulty and could be altered,” Kawall, a former Treasury Secretary who served under Mantega in 2006, said during a conference call yesterday.
International investors, who account for about a third of BM&FBovespa’s stock trading, will likely buy American depositary receipts, punishing smaller Brazilian companies who can’t afford the costs of listing overseas, Kawall said. The fact that money raised through ADRs is seen as direct investment and isn’t taxed, while local capital raising will be subject to the levy, is one of the “inconsistencies” in the regulation, he said."
BM&FBovespa to Propose Alternatives to ‘Faulty’ Tax - Bloomberg.com
Monday, October 19, 2009
Brazil to Impose Tax on Foreign Inflows, Mantega Says (Update3) - Bloomberg.com
Brazil to Impose Tax on Foreign Inflows, Mantega Says (Update3) - Bloomberg.com
By Adriana Brasileiro and Andre Soliani
Oct. 19 (Bloomberg) -- Brazil will impose taxes on purchases by foreign investors of real-denominated, fixed-income securities and on purchases of stocks, Finance Minister Guido Mantega said.
The measures are being taken “to avoid an excess speculation in the stock market and in capital markets,” Mantega told reporters in Sao Paulo.
The real has gained 35 percent since the beginning of the year, the best performer amid the 16 most traded currencies tracked by Bloomberg. The currency has gained 5.3 percent in the past month.
The central bank started purchasing dollars on May 8 in a bid to temper the real gains. The currency weakened 0.5 percent to 1.7177 per U.S. dollar at 4:28 p.m. New York time.
Earlier today, the Brazilian real was cut to “underweight” from “overweight” in RBC Capital Markets’ model portfolio on concern the government would impose new taxes.
Today’s announcement reverses last year’s decision to end such taxes. In October 2008, President Luiz Inacio Lula da Silva eliminated a tax, known locally as IOF, of 1.5 percent on foreign investments in certain financial products and of 0.38 percent on foreign-currency loans.
“Excess global liquidity could lead to an over-appreciation of the real,” Mantega said. That would threaten to hurt the country’s exporters and further fuel demand for imports.
Foreign investor will pay a 2 percent tax when they enter the country to buy stocks or fixed-income securities.
In the short term, the measure may help keep the real above 1.7 per U.S. dollar, said Antonio Madeira, chief economist at MCM Consultores Associados Ltd. As the market creates new investment strategies to bypass the tax, the impact in the currency market will be lost, he said.
Mantega said the measures may not lead the real to weaken, but are designed to slow its appreciation and prevent the creation of bubbles in Brazilian markets. “These are to prevent excesses,” he said." ....
By Adriana Brasileiro and Andre Soliani
Oct. 19 (Bloomberg) -- Brazil will impose taxes on purchases by foreign investors of real-denominated, fixed-income securities and on purchases of stocks, Finance Minister Guido Mantega said.
The measures are being taken “to avoid an excess speculation in the stock market and in capital markets,” Mantega told reporters in Sao Paulo.
The real has gained 35 percent since the beginning of the year, the best performer amid the 16 most traded currencies tracked by Bloomberg. The currency has gained 5.3 percent in the past month.
The central bank started purchasing dollars on May 8 in a bid to temper the real gains. The currency weakened 0.5 percent to 1.7177 per U.S. dollar at 4:28 p.m. New York time.
Earlier today, the Brazilian real was cut to “underweight” from “overweight” in RBC Capital Markets’ model portfolio on concern the government would impose new taxes.
Today’s announcement reverses last year’s decision to end such taxes. In October 2008, President Luiz Inacio Lula da Silva eliminated a tax, known locally as IOF, of 1.5 percent on foreign investments in certain financial products and of 0.38 percent on foreign-currency loans.
“Excess global liquidity could lead to an over-appreciation of the real,” Mantega said. That would threaten to hurt the country’s exporters and further fuel demand for imports.
Foreign investor will pay a 2 percent tax when they enter the country to buy stocks or fixed-income securities.
In the short term, the measure may help keep the real above 1.7 per U.S. dollar, said Antonio Madeira, chief economist at MCM Consultores Associados Ltd. As the market creates new investment strategies to bypass the tax, the impact in the currency market will be lost, he said.
Mantega said the measures may not lead the real to weaken, but are designed to slow its appreciation and prevent the creation of bubbles in Brazilian markets. “These are to prevent excesses,” he said." ....
Governo taxa capital estrangeiro em 2% para conter valorização do real frente ao dólar - O Globo
Governo taxa capital estrangeiro em 2% para conter valorização do real frente ao dólar - O Globo
Plantão | Publicada em 19/10/2009 às 19h02m
SÃO PAULO - O ministro da Fazenda, Guido Mantega, anunciou nesta segunda-feira que o governo vai criar uma aliquota de 2% do IOF para taxar o ingresso do capital estrangeiro. A medida passa a vigorar nesta terça-feira. A partir desta data, todo o capital estrangeiro que entrar no país para aplicações em bolsa ou em renda fixa e variável terá que pagar uma taxa de 2%.
Segundo o ministro Mantega, a medida tem por objetivo frear a especulação com o dólar e a valorização do Real.
- A medida é para evitar que haja excesso de especulação na bolsa e no mercado financeiro. O Brasil se tornou um país forte atrativo para o mercado internacional e como há um excesso de capital no mundo, temos que evitar a especulação no país - disse Mantega.
Desde o começo do ano, já entrou no país algo em torno de US$ 20 bilhões e tem dias que entram até US$ 5 bilhões. Com o início dos projetos do pré-sal, o governo acredita que a entrada de recursos pode aumentar muito mais, supervalorizando o real frente ao dólar e, com isso, prejudicar as exportações e facilitar as importações.
- Queremos impedir o excesso de valorização do real. Essa valorização prejudica as exportações brasileiras e barateia as importações - esclareceu o ministro, em entrevista concedida em São Paulo."
Plantão | Publicada em 19/10/2009 às 19h02m
SÃO PAULO - O ministro da Fazenda, Guido Mantega, anunciou nesta segunda-feira que o governo vai criar uma aliquota de 2% do IOF para taxar o ingresso do capital estrangeiro. A medida passa a vigorar nesta terça-feira. A partir desta data, todo o capital estrangeiro que entrar no país para aplicações em bolsa ou em renda fixa e variável terá que pagar uma taxa de 2%.
Segundo o ministro Mantega, a medida tem por objetivo frear a especulação com o dólar e a valorização do Real.
- A medida é para evitar que haja excesso de especulação na bolsa e no mercado financeiro. O Brasil se tornou um país forte atrativo para o mercado internacional e como há um excesso de capital no mundo, temos que evitar a especulação no país - disse Mantega.
Desde o começo do ano, já entrou no país algo em torno de US$ 20 bilhões e tem dias que entram até US$ 5 bilhões. Com o início dos projetos do pré-sal, o governo acredita que a entrada de recursos pode aumentar muito mais, supervalorizando o real frente ao dólar e, com isso, prejudicar as exportações e facilitar as importações.
- Queremos impedir o excesso de valorização do real. Essa valorização prejudica as exportações brasileiras e barateia as importações - esclareceu o ministro, em entrevista concedida em São Paulo."
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