The Ministry of Finance reported on Monday (09/05) in the Official Gazette, Ordinance No. 163, which regulates the calculation of the Medium Term Rescheduling (PRC) of the Fixed Income Index Funds, internationally known as ETF (Exchange Traded Fund) fixed income, referred to in Paragraph 5 of the art.2 Law 13043 of November 13, 2014.
According to this law, for the purpose of calculating the income tax, the income from the fixed income ETF should be taxed from decreasing rates depending on the PRC of the funds’ portfolios.
The methodology for determining the PRC, detailed in Ordinance No. 163, considers the risk of interest rate associated with each type of index of securities, including derivative contracts able to change the final statement of the shareholders, in addition to prazoremanescente to maturity.
In this regard, investors who take higher risk of interest rate are benefiting from more favorable tax status. Thus, the taxation model encourages the lengthening of the maturity of bonds and adds to driver indexation of assets.
It is noteworthy that the concept of PRC is not innovation in the Brazilian market and was even applied to regulations governing the Open Supplementary Pension Entities.
The completion of regulatory standards applied to Income Investment Funds Fixed part of the Ministry’s agenda for development of the capital market, seeking to reduce the degree of indexation of the economy by consolidating price references (benchmarks) alternative to fees interest of 1 day, prevailing in the Brazilian market and inhibiting elongation of public and private funding.