Bye bye, so long, farewell … Official Gazette

If you have never read the Brazilian Official Gazette you are missing out on nothing! Microscopic letters are a test for our sight. The days of the Gazette are coming to an end provided that the Provisional Measure No. 892/2019MP 892), published last August 6, is converted into law.

The birth of the Official Gazette is so old that it dates back to the time of the transfer of the Portuguese court to Brazil in the early nineteenth century. That’s right! Since then it is up to the Official Gazette to disclose the official normative and administrative acts of the government. The Corporation Law of 1976 requires companies to publish their corporate acts, communications to shareholders and financial statements in the State Official Gazette and also in a high circulation newspaper. And these publications are very expensive.

With the digital age, this requirement has lost its raison d’être. Today, the publication in the Official Gazette and in another newspaper does not guarantee the publicity and access to the shareholders as was the intention of the legislator.

20 years after Google was launched, MP 892 brought to an end publications in newspapers, allowing public companies to disclose the required information on their own websites, the CVM website, and the market entity`s website where the securities are admitted to trading, such as B3Brazilian Stock Exchange), with the CVM being responsible for regulating the application of such legislation.

The text of the provisional measure did not specify how publications of documents related to privately held corporations will be handled, but merely mentions that such matters will be further regulated by the Finance Ministry.

The absence of express regulation on the subject for both public and private companies creates legal uncertainty, since companies do not yet clearly know how to proceed with their publications.

The MP 892 is effective until October 19, 2019, and may be extended for the same period, and must be approved by the National Congress to be converted into law. However, these rules will only be effective after the regulations are issued by the responsible agencies. Until then, the old rules apply.

This is good news on the way to reduce bureaucracy of companies, bringing great savings to companies and generating more agility and efficiency in the disclosure of relevant information to the market.

By Marcella Pontes de Oliveira Bertolini, associate at Candido Martins Advogados

Neither too much, nor too little: IOF in export transactions

This phrase reflects the new position of the Brazilian IRS on the incidence of Tax on Financial OperationsIOF) on export revenue inflows.

Last December, the IRS published a note preventing exporting companies from having a good night sleep. The IRS began to demand the IOF on foreign exchange transactions on the inflow of funds in Brazil immediately after the conclusion of the export process. In other words, the date for securing the zero tax rate on money entering the country would be the date of the completion of the export process.

With this, the beginning of the year was hectic for exporters, since banks began to inform the companies that they would withhold the applicable tax.

It was then that the Attorney General’s Office of the National TreasuryPGFN) issued an opinion that made the deadline more flexible, motivating the IRS to consider its position and back down, publishing on July 15 another note modifying  the previous one.

According to the new position of the IRS, the taxpayers must observe the form and the term established by both the National Monetary CouncilCMN) and the Central Bank, so that the period to ensure the zero rate of resources in the country becomes 750 days.

Neither too much, nor too little: the deadline is no longer indefinite, nor immediately after the finalization of exports. The tax authorities have chosen a middle ground.

Although the new position is positive for taxpayers, it can generate even more bureaucracy for Brazilian companies that will probably have to prove to banks that the inflow of funds is linked to the export procedure respecting the deadline set by the monetary agencies.

By Marcela Leal Sammarone, associate at Candido Martins Advogados