ARTICLE · 03 FEBRUARY 1998
Changes In Tax Legislation
BrazilAccounting and Audit
Through Provisional Measure 1602/97, published in the Official Gazette on 13 November 1997, Brazil introduced a series of spending cuts and tax increases. The emergency measures are designed to reduce the budget deficit and restore the confidence of investors. The tax measures deal with tax avoidance, the reduction of tax incentives, export promotion, disincentives for imports and international travel. Some of the tax measures became effective upon publication, but the main ones become effective on 1 January 1998.
Corporate income tax
Foreign-source income derived by a Brazilian company through a foreign subsidiary or branch will be included in the Brazilian company's taxable base for the calendar year in which the income is made available to the company. In the case of a foreign branch, income is deemed to be made available to the company on the date of the relevant balance sheet and, in the case of a foreign subsidiary, on the date of payment.
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