Brazil is undergoing a discussion about a major tax reform that is certainly the largest in the past 50 years.
There are several proposals suggesting the rationalization and simplification of the system aiming a better legal certainty for domestic and foreign investors and lenders.
In circunstance of potential major changes to happen, all the attention is needed in the transition period when some assets should be reevaluated and, perhaps reallocated.
For example, today Brazil is one of a few countries that do not tax dividends. They are entirely exempt: the ones distributed to Brazilian residents and companies, the ones distributed to foreigners, and even the ones distributed to residents in countries treated as tax havens in Brazilian legislation.
The proposals are more and more pointing towards reducing taxation burden on business and increasing taxation on dividends. Also, a number of States are reviewing estate tax, particularly on large fortunes.
All this has a rational of elevating the taxation on personal assets and reducing the taxation on consumption and on companies’ income.