Published in the extra edition of the Federal Official Gazette on August 28, 2023, Provisional Measure (“MP”) No. 1,184/2023, equated Closed-End Investment Funds with Common Investment Funds.

With the change, Exclusive Investment Funds will be subject to Withholding Income Tax (IRRF) at a rate of 15% or 20%, the latter if the fund is short-term.

The Provisional Measure stipulates that the tax will be levied in the form of “come-cotas”, with the tax being levied twice a year, Previously, these funds were only taxed on the redemption of shares.

According to the Executive Branch, there are 2,500,000 Brazilians with exclusive funds, which total R$756.8 billion in assets.