PROVISIONAL MEASURE # 2.062-61, OF December 28, 2000.

Changes the income tax legislation and gives other arrangements.

THE PRESIDENT OF THE REPUBLIC, in the use of the attribution which confers Article 62 of the Constitution, adopts the following Provisional Measure, with force of law,

Art. 1º The legal person whose claims with legal persons of public law or with company under his / her control, company publishes, the mixed economy company or its subsidiary, arising from construction by undertaking, the supply of goods or provision of services, are quieted by Power Publico with holder of its issuance, including with Securitization Certificates, issued specifically for that purpose, you can compute the share of the profit, corresponding to those credits that there has been deferred in the manner of the provisions of § § 3º and 4º of the art. 10 of Decree-law No. 1,598 of December 26, 1977, in determining the actual profit of the base period of the bailout of the securities or of its disposal in any form.

Art. 2º The willing on art. 65 of Law No. 8,383 of December 30, 1991 also applies, in the cases of delivery, by the winning bidder, in the title of public debts of the State, the Federal District or Municipalities, as a counterpart to the acquisition of shares or shares of company under direct or indirect control of the said legal persons in public law, in the case of disestatization by them.

Art. 3º It is reduced by fifteen per cent the aliquot of the income tax incident at the source on the paid, credited, delivered, maids or remitted to the exterior of the royalties,

§ 1º Regarding the generator facts occurring from 1º January 2001, the aliquot of which treats the caput becomes twenty-five per cent.

§ 2º The aliquot referred to in the preceding paragraph and applicable to the paid imposrtancia, credited, delivered or remitted to the exterior for technical, administrative and similar technical services and assistance, shall be reduced to fifteen per cent, in the hypothesis of institution of intervention of intervention of the economic domain incident on those

§ 3º The reduction in which it treats the preceding paragraph shall apply from the beginning of the collection of the said contribution.

§ 4º Without prejudice to the provisions of the inciso V of the art. 4º of Law No. 8,661 of June 2, 1993, to industrial and agrolivestock enterprises implementing Industrial Technological Development Programmes-PDTI and Agri-livestock Development Programmes-PDTA, will be granted credit on the contribution referred to in § 2º,in fine.

§ 5º The credit referred to in the preceding paragraph:

I? shall be determined on the basis of the due contribution, incident on payments, credits, deliveries, jobs or remittances to the exterior under royalties of any nature, upon use of the following percentage:

a) fifty per cent, with respect to the closed swap periods from 1º January 2001 until December 1, 2003 ;

b) thirty per cent, with respect to the closed span periods from 1º January 2004 until December 31, 2008 ;

c) ten per cent, with respect to the closed span periods from 1º January 2009 until December 31, 2013 ;

II? will be used, exclusively, for the purposes of deducting the incident contribution in later operations, relating to royalties, during the period of realization of the programme.

III? will only be granted to the company that takes the commitment to perform, during the execution of the Program, expenditures with research in the Country in amount equivalent to, at the very least, two and a half times of credit value.

Art. 4º It will not focus the income tax on the source on the income paid or credited to the company domiciled abroad, by the contraction of telecommunication services, by telecommunication company that centralize, in Brazil, the provision of corporate network services of legal persons.

Single Paragraph. For the purposes of this article, it is considered to be corporate network the private telecommunications network of a company or entity, which interconnects its various points of operations in Brazil and abroad.

Art,. 5º The assets of the immobilized permanent asset, except for the bare land, acquired by legal person who explore rural activity, for use in that activity, could be depreciated in full in the year of the acquisition itself.

Art. 6º Excludes the incidence of income tax at source and income statement the value of the rescue of private pension contributions, the burden of which has been on the physical person, received on the occasion of their dislocation of the benefits plan of the entity, which corresponds to the parcels of contributions effected in the period 1º from January 1989 a to December 31, 1995.

Art. 7º Will be admitted as expenses with planned instruction in art. 8º. inciso II, point?b?, of Law No. 9,250 of December 26, 1995, payments made to crèches.

Art. 8º It is reduced to zero, with respect to the generator facts occurring from 1º January 2001, the aliquot of the income tax incident on remittances, to the outside, intended exclusively for the payment of expenses related to market research for Brazilian export products, as well as those arising from participation in exhibitions, fairs and similar events including rents and leases of standes and exhibition venues, linked to promotion of Brazilian products, as well as advertisement expenses carried out within the framework of that events.

§ 1º The Executive Power shall lay down the conditions and requirements for the application of the provisions of this article.

§ 2º Regarding the period of aliquot in the caput will be ascertained by the Executive Power, upon projection of the effective renounces verified in the first semester.

§ 3º For purposes in the art. 14 of Law 1º of January 2001 a to December 31, 2003, the annual revenue waiver arising from Supplementary Reduction No. 101 of May 4, 2000, the annual amount of the waiver, ascertained in the form of the preceding paragraph, in the months of September each year, it will be costed to the account of financial sources of the reserve in the contingency, save if checked out of excess collection, ascertained also in the form of the preceding paragraph, in relation to the forecast revenue, for the same period, deducted the value of the resigces.

§ 4º The excess collection perhaps ascertained under the preceding paragraph, in fine, will be used for compensation of the amount of the waiver.

§ 5º The aliquot referred to in the caput, on the assumption of payments to resident or domiciled in countries other than income tax or that for the maximum aliquot of less than twenty per cent, to which the art is referred. 24 of Law No. 9,430 of December 27, 1996 will be twenty-five per cent.

Art. 9º Stay convalidated the acts practiced on the basis of the Provisional Measure No. 2.062-60 of November 30, 2000.

Art. 10 This Provisional Measure shall come into force on the date of its publication.

Brasilia, December 28, 2000 ; 179º of Independence and 112º of the Republic.

Fernando Henrique Cardoso

Pedro Malan

Ronaldo Mota Sardenberg

Benjamin Benzaqun Sicsú