President Luiz Inácio Lula da Silva (PT) vetoed the exemption for investment and equity funds and those carrying out operations with real estate in the new tax reform regulations, which were sanctioned this Thursday (16).
The exclusion also applies to FIIs (Real Estate Investment Funds) and Fiagro (Investment Funds in Agribusiness Production Chains).
The funds were excluded from exceptions to the Contribution on Goods and Services (CBS) and the Tax on Goods and Services (IBS), new taxes that will come into force with the reform.
The extraordinary secretary for tax reform, Bernard Appy, explained that the withdrawal of the exemption was based on legal issues. During a press conference, he highlighted that “there was no constitutional support for these funds to be considered beneficiaries of IBS and CBS”.
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According to the secretary, the guidance for the veto was based on Constitutional Amendment 132, which defines entities that may have tax benefits or tax exemptions.
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He stated that the characterization of these funds as non-contributing would be equivalent to an unconstitutional tax benefit, which led to the need for the veto.
The decision was supported by a legal assessment by the Attorney General’s Office (AGU), which endorsed the measure.
