Lira wants offshore taxation without exchange variation – 08/23/2023 – Market

The mayor, Arthur Lira (PP-AL), said on Wednesday night (23) that proposals for taxing offshore companies and the super-rich should advance in the Chamber of Deputies, provided that an agreement made with the government and that modifies the initial idea of ​​the Lula (PT) administration.

The agreement mentioned by Lira cites a change in the text so that the calculation of taxation no longer considers gains from exchange rate variation of those who have the company abroad. The MP (provisional measure) published by Lula and by Minister Fernando Haddad (Finance) in April determined that the fluctuation would count towards the collection of taxes.

“The exchange variation of the principal invested in the entity abroad will compose the taxable capital gain […]”, says the statement of reasons, a document that accompanies the MP, sent by the government to Congress in April.

According to Lira, the removal of this point makes it possible to vote on the proposal. “If it is the text agreed with Secretary Dario [Durigan, secretário-executivo do Ministério da Fazenda]Yes [tem clima para aprovar]. No exchange rate taxation,” she said.

Lira also defended “a feasible interest rate so that the government collects more and those who have it can pay without having to withdraw funds from Brazil and go to other countries with lower rates”.

According to Lira, these are some of the terms of the agreement signed with Durigan, who heads the Ministry of Finance during Fernando Haddad’s trip abroad, and Geraldo Alckmin, vice-president.

If the removal of the section on exchange variation is not compensated by another initiative, Haddad’s proposal will be dehydrated and will lose its potential for collection. When it published the MP on the subject, the government announced that it could obtain with the new rules BRL 3.25 billion in 2023, BRL 3.59 billion in 2024 and BRL 6.75 billion in 2025.

As shown to Sheetoffshore taxation was the epicenter of friction between Lira and Haddad, after the proposal was included within the minimum wage provisional measure, without an agreement with parliamentarians.

A tense conversation about the proposal to tax companies or offshore funds preceded Haddad’s declaration that the House commanded by Lira has “very great power”.

Lira countered the statements and the leaders of the House mobilized to remove the offshore measure from the minimum wage text, imposing a setback on the federal government. In the end, a deal was struck.

Now, the theme will be taken up again in another constitutional urgency project (locking the agenda of the House in 45 days), to be sent by the Executive. The minimum wage measure was approved by the Chamber, with the section that expanded the Income Tax exemption range and without anything referring to offshore companies.

The exclusion of the offshore stretch, however, generated a problem in sanctioning the correction of the IRPF table. Lula would have to veto the measure, which was a campaign promise, or he would need to find another source of compensation, to be launched when the new law is sanctioned.

Therefore, according to Durigan, the government will propose the taxation of exclusive funds via MP, which is effective immediately. The text should bring a device that encourages the holders of these resources to update the equity of the funds by paying a reduced rate of 10% on the income obtained in recent years.