Key Themes to Financial Institutions in 2020
The beginning of the year is a favorable moment to reflect and to plan. After reflecting upon the recent trends in legislation and in the economic environment, we have selected a few themes that we understand to be relevant for financial institutions and other financial services organizations in Brazil in 2020.
1 – Tax Reform: with the potential taxation of dividends and the potential increase in corporate tax rates, there will be the need to review the business models, possible tax benefits and forms of remuneration.
2 – Exchange rate volatility: exchange rate volatility will continue to cause fluctuations in federal welfare taxes (PIS / COFINS) bases and may, at times, generate losses. Thus, we recommend the review of PIS and COFINS tax bases in general, as well as the expenses and income from the activity that can be deducted from the base.
3 – Competitiveness: with taxation in the financial market ranging from 52.52% to 15%, often with cumulative taxation regimes, we suggest the review of business models, products and services portfolios in order to be competitive in credit markets, commercial partnerships, structuring, placement and distribution services, structured transactions, derivatives and even proprietary positions.
4 – Leverage: with lower interest rates and a more competitive market, we suggest that organizations revisit their capital bases, allocation criteria and capital consumption, as well as optimize their use and available sources of capital and liquidity.
5 – Basis Review: we also suggest that organizations take the opportunity to review their calculation bases of IRPJ, CSLL, PIS, COFINS, IRRF, CIDE, IOF / Exchange, PIS-Import, COFINS-Import, ISS-Import, to ensure that the withdrawals are correct and optimized.
6 – Privacy: compliance with the Brazilian General Data Protection Law is now entering the final stretch and should be fully implemented by August.
Contributing Advisors
