Brazilian Income Tax: Normative Ruling provides for the taxation of income earned by foreign investors in the country
Normative Ruling 1585 provides for income tax on net income and gains earned in the financial and capital markets. The art. 88 to 98 provide for the taxation of income earned by an investor resident or domiciled abroad, individually or collectively, who conducts financial operations in the Country in accordance with the rules and conditions established by the CMN (National Monetary Council), non-resident or domiciled in a country with favored taxation under art. 24 of Law # 9430 96, except the sovereign wealth funds referred to in § 15 of art. 92.
Art. 24 of Law 9,430 defines a country with favored taxation as one that does not tax income or that taxes it at a maximum rate of less than twenty percent. Sovereign funds that carry out financial transactions in the country in accordance with the rules and conditions established by the CMN, even if domiciled or resident in countries with favored taxation, have a reduction of zero of IR, under the conditions established in art. 92 of Normative Ruling # 1515.
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