Government publishes MP that taxes tax havens at up to 22.5%, justification is to compensate for the increase in the income tax exemption

Last Sunday (04/30), the government published a Provisional Measure (MP) that may tax financial remittances made to tax havens at up to 22.5%. This measure was taken in order to compensate for the increase in the exemption range of the Income Tax for Individuals (IRPF). The government expects to collect R$3.2 billion this year alone.

The MP targets individuals who send funds to places with lower taxation or even tax exemption – the so-called tax havens, such as the Cayman Islands and British Virgin Islands (BVI). These remittances are usually made by companies seeking to pay less tax or by individuals who have accounts in tax havens.

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With the new measure, the taxation of these financial remittances to tax havens will be up to 22.5%. The idea is that this revenue will be used to offset the increase in the income tax exemption range, which will now be R$2,640.

The MP also establishes that companies that make financial remittances to tax havens will have to inform the IRS about these transactions. This measure aims to increase transparency and control over financial transactions.


Written by Marcos Ferreira, Content Assistant at Drummond Advisors

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