Published on 20/12/2024, the regulation (“Portaria MF”) No. 2.029/2024 has updated the criteria for classifying countries with favorable tax regimes. This new regulation aims to exclude countries that significantly promote the development of the national economy through substantial investments from these categories. The government expects that the proposed reclassification will increase the inflow of foreign resources and stimulate the growth of strategic sectors in the Brazilian economy.
According to articles 24 and 24-A of Law No. 9.430/1996, jurisdictions that do not tax income or tax income at a maximum rate lower than 17% are considered countries with privileged tax regimes and are included in the list of “tax havens” published by the Tax Authority (IN RFB No. 1.037/2010). However, from now on, countries on the list may request a reclassification if (i) they invest in national public securities, corporate shares, and Brazilian funds and (ii) the investments were made at least five years before the application. Among companies, priority will be given to companies whose activities align with sustainable practices.
This development is particularly relevant for individuals who own offshore companies, as, with the approval of Law No. 14.754/2023, they will be required to tax the annual profits sourced from their controlled entities based on countries with favorable tax regime at a fixed rate of 15%. The calculation basis for this taxation is the profit recorded in the company’s annual financial statements, which, in the case of an offshore entity based in a country with favorable tax regime, must be prepared in accordance with Brazilian accounting standards (BR GAAP).
Given this new scenario and the possibility of updating the “tax havens” list provided by the Tax Authority, we advise taxpayers to closely monitor the latest list’s updates to ensure proper compliance with their tax obligations concerning their controlled companies abroad.
Lorusso & Partners continues to analyze all updates on this matter and remains at disposal to clarify any relevant questions.
