Brazil’s Federal Revenue Service and the Ministry of Finance voiced their understanding in relation to the taxation of foreign investors that participate in tender offers. In a document sent to Amec in response to the declaration the association sent in July, the authorities restated that, in tax terms, sales of shares in tender offers are different from the purchase and selling of shares in the stock exchange.
Amec understands there is no justification for the adoption of a tax treatment in tender offers different from that used in the purchase and selling of shares without offers. It means that the 15 percent tax exemption on capital gains for foreign investors in the stock exchange is also valid for the tender offers, including delisting.
In the document, the Brazilian Federal Revenue Service reminds that the Judiciary has analyzed the topic and that, although Amec understands that “the interpretation of the tax authority lacks economic rationale or that the exemption would create ‘an arbitration industry’ and discourage foreign investors to invest in the country, any change shall only be made by law.”
The document in response to Amec’s declaration is available here.