The Brazilian Executive Branch sent to the country’s Congress the proposed regulation of the Tax Reform.
See below 5 of the key aspects of the proposed regulation:
1. Definitions of specific regimes and tax reductions for goods and services;
2. The list of goods subject to the Selective Tax, which aims to tax the consumption of goods considered harmful to health and the environment, such as cigarettes, alcoholic beverages, vehicles, among others;
3. The definition of the foods that make up the basic food basket and that will benefit from the zero rate, such as rice, beans, flour, sugar and others, as well as the foods that will be subject to the reduced rate;
4. Regulation of immunities on exports, non-profit educational and social assistance institutions, workers’ unions, operations with books, newspapers and periodicals, among others;
5. General provisions related to the principles of destination, non-cumulative nature and transition period rules.
At first, the tax reform proposal refers to taxation only on consumption and the expectation is that the text will be considered by the Chamber of Deputies before the parliamentary recess on July 17th. Changes related to income tax will be presented at a later date.
