On August 29, 2023, the Executive Branch sent Bill of Law (PL) No. 4.173/2023 to the Chamber of Deputies, following the failure to approve Provisional Measure (MP) No. 1.171/2023, which had its provisions incorporated into MP 1.172/2023.

The text of the Bill has undergone few changes compared to the text of Provisional Measure 1.172/2023, which are highlighted below:

• Rule on dividends calculated and taxed, but not distributed, from foreign entities;
• Possibility of offsetting tax paid abroad and in Brazil, for controlled companies, respecting the rate of 22.5%;
• Complementation of the rules on the taxation of exchange rate variations;
• Possibility to consider the foreign entity transparent and declare the assets held by it directly by the controlling individual;
• Possibility of offsetting losses on financial investments abroad, by the individual, as long as there is suitable supporting documentation; and,
• The Trustee is not responsible for providing information about the Trust.

The Bill is being processed under urgent procedure in the Chamber of Deputies.