On August 2, 2013, Answer to Inquiry No. 103 was published, presenting the IRS position to the extent that the computation of expenses with Interest on Net Equity concerning the period in which Transition Tax Regime was in force must be made by taxpayers based on the composition and value of net equity defined in accordance with accounting methods and criteria in force on December 31, 2007. This position coincides with the understanding of the National Treasury Attorney Office concerning dividends, in Opinion PGFN/CAT No. 202/2013.

It is also relevant to emphasize that Law No. 11,941/2009 already provides that the account of “adjustment of equity evaluation” related to the evaluation of assets and liabilities under fair value, cannot be comprised in the calculation basis of the interest on net equity, but this same exclusion is not provided for any other net equity adjustments.

(Answer to Inquiry IRS No. 103, 05.09.2013, Official Gazette of 08.02.2013).