PROVISIONAL MEASURE N ° 2.189?48, July 26, 2001

Changes income tax legislation with respect to the incidence at source on income from financial applications, inclusive of beneficiaries residing or domiciled abroad, to the conversion, in social capital, of overseas obligations of legal persons domiciled in the Country, extends the chances of option, by physical persons, by the simplified discount, regulates the information, in the statement of income, of deposits held in banks abroad, and gives other previdences.

THE PRESIDENT OF THE REPUBLIC, in the use of the attribution that confers it on art. 62 of the Constitution, adopts the following Provisional Measure, with force of law:

Art. 1º The aliquot of the income tax in the source incident on the income earned in the bailout of shares of the investment funds of which treats the § 6º of the art. 28 of Law No. 9,532 of December 10, 1997, with the amendment introduced by art. 2º, it gets reduced to ten percent.

Art. 2º The percent of eighty percent referred to in § 6º percent of art. 28 of Law No. 9,532, of 1997, gets reduced to sixty-seven percent.

Art. 3º The determination of the basis of calculation of income tax at the source, in accordance with the provisions of the art. 28 of Law No. 9,532, of 1997, will be applicable only from 1º July 1998.

Art. 4º In the first half of 1998, the incidence of income tax at source on income earned in funds in funds of investment give? se?á in the rescue of quotas, if any, to the following aliquots:

I? of ten per cent, in the case:

a) of the funds mentioned in the art. 1º of this Provisional Measure; and

b) of the funds from which it treats art. 31 of Law No. 9,532, of 1997, while framed in the limit provided for in § 1º of the same article;

II? of twenty percent, in the case of the remaining funds.

Single paragraph. The base of calculation of the income tax of which it treats this article will be determined as per the provisions of § 7º of the art. 28 of Law No. 9,532, of 1997.

Art. 5º For the purposes of incidence of the income tax at the source, consider? if paid or credited to the quotists of the investment funds, on the date on which the first period of deficiency in the second half of 1998, the yields corresponding to the positive difference between the value of the quota, on June 30, 1998, and:

I? the respective cost of acquisition, in the case of the funds referred to in art. 31 of Law No. 9,532, of 1997;

II? the respective cost of acquisition, in the case of shares acquired from 1º January 1998;

III? the value of the quota verified on December 31, 1997, in the remaining cases.

§ 1º The provisions of this article do not apply to the funds which, in the month of June 1998, fall within the limit of which it treats § 6º of the art. 28 of Law No. 9,532, 1997, with the amendment of the art. 2º of this Provisional Measure.

§ 2º In the case of no-grace-term funds for rescue of quotas with income or whose grace period is higher than ninety days, consider? if paid or credited the income on day 1º of July 1998.

Art. 6º As of 1º January 1999, the incidence of income tax at source on the incomes earned by any beneficiary, inclusive legal person exempt and the immune from which it treats the art. 12 of Law No. 9,532, of 1997, in the applications in investment funds, will occur:

I? on the date on which each grace period is completed for ransom of quotas with income, in the case of funds subject to that condition, ressalvated the provisions of inciso II;

II? on the last working day of each quarter? calendar, in the case of funds with periods of grace higher than ninety days;

III? on the last working day of each month, or in the rescue, if occurred on another date, in the case of no-grace-term funds.

§ 1º The basis of calculation of the tax will be the positive difference between the value of the quota ascertained on the date of rescue or at the end of each incidence period referred to in this article and on the date of application or at the end of the previous incidence period, as the case may be.

§ 2º The losses ascertained in the quota ransom could be compensated with gains earned in ransoms or later incidences, in the same investment fund, according to procedure to be defined by the Federal Revenue Office.

§ 3º The quotists of the investment funds whose resources are applied in the acquisition of shares of other investment funds will be taxed in accordance with the provisions of this article.

§ 4º The incomes earned by the portfolios of the funds of which it treats § 3º stay exempt from the income tax.

§ 5º The provisions of this article do not apply:

I? to the quotists of the investment funds referred to in the art. 1º, which will be taxed exclusively in the quota ransom;

II? to the legal persons of which it treats art. 77, inciso I, and the foreign investors referred to in the art. 81, both of Law No. 8,981 of January 20, 1995, which are subject to the standards laid down in it and in the subsequent legislation.

Art. 7º Regarding the second half of 1998, it is provided to the trustee of funds of investment ascertaining the income tax, due by the quotists, according to the provisions of the art. 6º, as an alternative to the form of disciplined apuram in the incisos I and II and in § 5º of the art. 28 of Law No. 9,532, 1997.

§ 1º Exercised the option provided in this article, the administrator of the fund shall submit to the incidence of the income tax at the source, on the December 22, 1998, the income corresponding to the positive difference between the value of the quota on that date and the ascertained on the date of acquisition or at the end of the previous incidence period, as the case.

§ 2º The income tax due by virtue of the provisions of § 1º will be collected, by the trustee of the investment fund, until the last working day of the year 1998.

§ 3º Aendowed the alternative of which it treats this article, is waived the income tax ascertainment in the form provided for in the art. 5º.

Art. 8º Is it reduced to zero the aliquot of the income tax incident on earned income, from 1º September 1998 to June 30, 1999, in financial applications, by the Fixed Income Funds? Foreign Capital constituted, according to the standards established by the National Monetary Council, with the purpose of capturing external resources for investment in issuance securities of the National Treasury or the Central Bank of Brazil and in assets fixed income financials issued by companies, and institutions based in the Country.

Single paragraph. The zero aliquot applies? if, including, the earned income, in the period referred to in the caput, relatively to the applications previously effected to the publication of this Provisional Measure.

Art. 9º The increase of capital upon conversion of the obligations of which they treat the incisos VIII and IX of the art. 1º of Law No. 9,481 of August 13, 1997, may be effected with the maintenance of the zero reduction of the aliquot of the income tax on the source relating to the interest, commissions, expenses and discounts already remitted.

§ 1º For the purposes of this article, it is vedated, in the remaining period envisaged for final settlement of the capitalized obligation:

I? the restitution of capital, including by extinction of the legal person;

II? the transfer of the respective shares or shares of capital to physical or legal person resident or domiciled in the Country.

§ 2º The defulfillment of the provisions of § 1º will make the corresponding tax payable, in respect of the amount of interest, commissions, expenses and discounts, from the date of the shipment, plus moratory and fine interest, of lives or of trade, as the case.

§ 3º The provisions of § § 1º and 2º apply to legal persons resulting from merger or spin-off of the capitalized legal person and the one that incorporates? la.

§ 4º The gain of capital arising from the positive difference between the equity value of shares or shares acquired with the conversion of which it treats this article and the value of the converted obligation will be taxed at the source, to the aliquot of fifteen percent.

§ 5º The capitalized amount in the form of this article will integrate the calculation basis for the purposes of determining interest on the equity capital referred to in art. 9º of Law No. 9,249 of December 26, 1995, observed the remaining applicable standards, including in relation to the incidence of income tax at source.

§ 6º The provisions of this article apply, too, to the obligations contracted until December 31, 1996, relating to the operations referred to in the caput, kept the tax benefits at the time granted.

§ 7º The Office of the Federal Revenue Office will expedite the necessary acts to the control of willing in this article.

Art. 10. The devices, listed below, of Law No. 9,532, 1997, go on to invigorate with the following essay:

I? the art. 6º, inciso lI:

Art. 6º ............................................................................................................................................................................

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II? the art. 26 of Law No. 8,313, of 1991, and the art. 1º of Law No. 8,685 of July 20, 1993 will not be able to exceed four per cent of the income tax due. " (NR)

II? the art. 34:

" Art. 34. The willing in the arts. 28 a 31 does not apply to the hypotheses that it treats art. 81 of Law No. 8,981 of 1995, which remain subject to the taxation standards provided for in the current legislation. " (NR)

III? the art. 82, inciso II, point? f? :

Art. 82. ..........................................................................................................................................................................

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II- ................................................................................................................................................................................

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f) the art. 3º of Law No. 7,418 of December 16, 1985, remunerated by art. 1º Amendment of Law No. 7,619, of September 30, 1987. " (NR)

Single paragraph. The art. 4º of Law No. 7,418, of 1985, renumbered by art. 1º of Law No. 7,619, of 1987, whose effects are reinstated by virtue of the provisions of inciso III of this article, allows for the deduction of the corresponding expendities as operating expense.

Art. 11. The arts. 10 and 25 of the Law No. 9,250 of December 26, 1995, they go on to invigorate with the following essay:

" Art. 10. Regardless of the amount of taxable income in the declaration, received in the calendar year, the taxpayer will be able to opt for a simplified discount, which will consist in deduction of twenty percent of the value of those income, limited to eight thousand actual, in the Annual Adjustment Statement, dispensed with attestation of the expense and the indication of its species.

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?Art. 25. .......................................................................................................................................................................

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§ 4º The deposits held at overseas financial institutions should be related in the declaration of goods, from the year? calendar of 1999, by the value of the balance of these foreign currency deposits converted into reais by the foreign exchange rate quotation on December 31, being exempt the patrimonial addition arising from the exchange rate change.

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Art. 12. The willing in the art. 10 of Law No. 9,250, 1995, with the essay given by art. 11 of this Provisional Measure, only applies to the generative facts occurring from 1º January 1998.

Art. 13. The art. 79 of Law No. 9,430 of December 27, 1996, it passes on the invigorating addition of the following single paragraph:

" Single paragraph. The Executive Power may be excepted, in temporary character, the application of the provisions of this article in relation to certain goods. " (NR)

Art. 14. The art. 9º of Law No. 9,317 of December 5, 1996, as amended by art. 6º Amendment of the Law No. 9,779 of January 19, 1999, it passes the vigour with the following essay:

Art. 9º ..........................................................................................................................................................................

I? in the condition of microenterprise, which has earned, in the year? calendar immediately preceding, gross revenue greater than R$ 120,000.00 (one hundred and twenty thousand reais);

II? in the condition of small-sized company, which has earned, in the year-year-end calendar immediately preceding, gross revenue exceeding R$ 1,200,000.00 (one million and two hundred thousand reais);

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XIX? that exerts the activity of industrialization, on its own or on order, of the products classified in Chapters 22 and 24 of the IPI Incidence Table? TIPI, subject to the taxation regime of which it treats Law No. 7,798, of July 10, 1989, kept, until December 31, 2000, the options already exercised. " (NR)

Art. 15. The portfolio acquisition of private health care plans does not characterize transmission of tax liability, in the terms of the art. 133 of the National Tax Code, provided that they are assured to all the participants of the said portfolio the same conditions of assisted-living coverage, as well as the counting of grace and benefits acquisition deadlines already transfixed, and the alienation, albeit at the symbolic price or free of charge:

I? is effected by determination of the competent body of the Executive Power, with the purpose of preventing damage to the consumer or user;

II? do not imply transfer to the purchaser of rights to be received relating to operations carried out or services previously provided to the divestment, or from any other parcel of the disposant's estate.

Art. 16. The taxation regime provided for in art. 81 of Law No. 8,981 of January 20, 1995, with the amendment introduced by art. 11 of Law No. 9,249 of December 26, 1995 applies? if the investor resident or domicile abroad, individual or collective, who carry out financial operations in the fixed income or variable income markets in the Country, in accordance with the standards and conditions set by the National Monetary Council.

§ 1º It is responsible for withholding and collecting income tax at the source, incident on the income from financial operations earned by any investor foreign, the legal person making the payment of the said income.

§ 2º The taxation regime referred to in the caput does not apply to investment coming from country that does not tax income or that the tribute to aliquot less than twenty percent, which will subject themselves to the same rules set for the residents and domiciles in the Country.

§ 3º Regarding the provisions of § 2º will be observed that:

I? without prejudice to the provisions of § 1º, the foreign investor shall, in the case of transactions carried out on stock exchanges, of goods, of futures and resembling, appoint an institution authorized to operate by the Central Bank of Brazil as responsible, in the Country, for the fulfilment of the tax obligations arising from the said operations;

II? in the case of shares acquired by December 31, 1999, for purposes of ascertaining the base of calculation of the income tax, the cost of acquisition, when it is not known, shall be determined by the weighted average price of the share, ascertained in the negotiations occurred, on the stock exchange with higher volume of operations with the stock, in the month of December 1999 or, if there had been no business that month, in the closest previous month.

§ 4º The Registry of the Federal Revenue May download standards for the control of operations carried out by foreign investors.

Art. 17. Special customs arrangements shall be imposed with respect to the import, without currency cover, of inputs for industrialization by order of the products classified in headings 8701 a to 8705 of the Incidence Table of the Products Tax Industrialized? TIPI, on account and order of legal person ordered domiciled abroad.

§ 1º Considerate? if inputs, for the purposes of this article, the chassis, bodywork, parts, parts, components and accessories.

§ 2º The import of the inputs give? se?á with suspension of the IPI.

§ 3º The Import Tax will only focus on imported inputs employed in the industrialization of the products, including on the hypothesis of the inciso II of § 4º.

§ 4º The products resulting from industrialization by order will have the following tax treatment:

I? when destined for the exterior, resolves? if the suspension of IPI incident on import and acquisition, in the domestic market, of the inputs in them; and

II? when destined for the domestic market, the wholesale commercial enterprise, controlled, directly or indirectly, shall be referred to by the legal person ordered domiciled abroad, on account and order of this, with suspension of the IPI.

§ 5º The wholesale commercial enterprise acquirer of the products resulting from the industrialization on order is equipped with the industrial establishment.

§ 6º The granting of the special customs regime will depend of prior habilitation before the Office of the Federal Revenue Office, which will expedite the standards required for compliance with the provisions of this article.

Art. 18. The rectification of tax returns and contributions administered by the Office of the Federal Revenue Officer, in the hypotheses in which it admitted, shall have the same nature of the declaration originally filed, regardless of authorization by the authority administrative.

Single paragraph. The Registry of the Federal Revenue Officer shall establish the admissibility hypotheses and procedures applicable to the rectification of declaration.

Art. 19. They are convalidated the acts practiced on the basis of the Provisional Measure No. 2.189?47 of June 28, 2001.

Art. 20. This Interim Measure takes effect on the date of its publication.

Brasilia, July 26, 2001; 180º of Independence and 113º of the Republic.

FERNANDO HENRIQUE CARDOSO

Silvano Gianni