Brazil to Prohibit Deduction of Interest on Net Equity

The Brazilian Chamber of Deputies is considering draft Bill PL 4258/2023, which was submitted on 31 August 2023 and would prohibit the deduction of interest on net equity (Juros sobre o Capital Próprio - JCP). JCP is a mechanism available to Brazilian companies to compensate their shareholders in addition to profit and dividend distributions. JCP is calculated by applying the Long-Term Interest Rate (TJLP) on a company's net equity, on a pro rate basis. The JCP is limited to the higher of 50…