On April 29, 2016, Interpretative Declaratory Act RFB (“ADI”) No. 03/2016 was published in the Official Gazette, where it outlined the effects of Sections 1 and 2 of Law No. 13,259/2016 which resulted from the conversion of the Law of Provisional Measure No. 692/2015. Pursuant to Section 1 of the ADI, the changes introduced in the tax legislation by Law No. 13,259/2016 will enter into force on January 1, 2017, in compliance with the provisions of Section 62, paragraph 2 of the Federal Constitution.

Consequently, it is clear that the Brazilian Internal Revenue Service understands that, in respect to the so-called “anteriority principle”, the progressive rates for income tax levied on the capital gain can only apply to taxable events that occur after January 1st, 2017.