Circular Letter CVM/SIN-SSE 02/22

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL
Rua Sete de Setembro, 111/2-5th and 23-34th Floors – Center – Rio de Janeiro - RJ – ZIP: 20050-901 – Brazil Tel.: (21) 3554-8686 - www.cvm.gov.br Circular Letter No. 2/2022/CVM/SIN/SSE Rio de Janeiro, September 20, 2022

To
Fund Administrators in general

Subject: Guidelines on the incidence and collection of the supervision tax on the securities markets governed by Law No. 7.940/1989.

1. Considering the questions raised by market participants in consultations regarding the interpretation of Law 14.317/22, as well as the guidelines published by this Authority on its website regarding this matter1, we issue this Circular Letter to consolidate the understanding of this Superintendence regarding the supervision tax on the securities markets (“CVM Tax”).

I) CVM Taxes

2. In accordance with Law 7.940/89, the currently provided scenarios for the incidence of the CVM Supervision Taxes are: (i) that resulting from the CVM’s registration activity (which we will call “Registration Tax”), introduced by means of MP 1.072/21; (ii) the periodic one, now annual (which will be hereinafter referred to as “Annual Tax”); and (iii) the tax for the realization of public offerings (hereinafter referred to as “Offering Tax”).

II) Taxpayers of the CVM Taxes

3. The taxpayers of the CVM Taxes are the natural and legal persons mentioned in Art. 3 of Law 7.940/892, amended by Law No. 14.317/2022.

1 https://www.gov.br/cvm/pt‐br/assuntos/regulados/taxa‐de‐fiscalizacao/perguntas‐frequentes. 2 Art. 3. The taxpayers of the Tax are: I – natural and legal persons who are part of the securities distribution system; II – national open companies and foreign companies subject to registration with the CVM; III – securitization companies; IV – investment funds, regardless of the assets that make up their portfolio; V – securities portfolio administrators; VI – independent auditors subject to registration with the CVM; VII – investment advisors; VIII – securities analysts and consultants; IX – companies benefiting from resources from tax incentives registered with the CVM; X – entities administering organized securities markets; XI – securities depository central institutions and other market infrastructure operating institutions; XII – electronic platforms for collective investment and legal entities, with headquarters in the country or abroad, participants in an experimental regulatory environment within the CVM; XIII – the investor, individual or collective, natural or legal person, fund or other collective investment entity, with residence, headquarters or domicile abroad, registered with the CVM as holder of an own account or collective portfolio; XIV – credit rating agencies; XV – fiduciary agents; XVI – providers of securities bookkeeping and custody services and issuers of securities deposit certificates; and XVII – securities offerors in the context of the realization of a public offering of securities, subject to registration or exempt from registration by the CVM.

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL
Rua Sete de Setembro, 111/2-5th and 23-34th Floors – Center – Rio de Janeiro - RJ – ZIP: 20050-901 – Brazil Tel.: (21) 3554-8686 - www.cvm.gov.br

4. It is worth remembering that, in accordance with the Civil Code, as amended by the Economic Freedom Law3, the taxpayers of the Supervision Tax are the investment funds, and not their respective service providers, who do not bear responsibility for these obligations.

III) Situations, Periodicities and Conditions for the collection of CVM Taxes

5. The situations, periodicities and conditions for the collection of the CVM Taxes are provided for in Articles 44 and 55 of Law 7.940/89.

3 Law No. 13.874/19, Art. 1.368-E: Investment funds respond directly for the legal and contractual obligations assumed by them, and service providers do not respond for these obligations, but are liable for damages caused when acting with intent or bad faith. § 1 If the investment fund with limited liability does not have sufficient assets to respond for its debts, the insolvency rules provided for in arts. 955 to 965 of this Code apply. § 2 Insolvency may be requested judicially by creditors, by its own deliberation of the fund's unitholders, in accordance with its bylaws, or by the Securities and Exchange Commission. 4 Art. 4. The Tax is due: I – revoked; II – revoked; III – annually and paid in full with respect to the entire year to which it refers, according to the values expressed in reais and established in Annexes I, II and III of this Law, pro rata payment not admitted; IV – upon the realization of a public offering of securities, subject to registration or exempt from registration by the CVM, with incidence on the value of the operation, as established in Annex IV of this Law; and V – upon the initial registration request as a participant in the securities market, as provided for in this Law, or the issuance of an equivalent authorizing act, in the case provided for in Annex V of this Law, pro rata payment not admitted and with full payment of the Tax regardless of the date of the request. § 1 The value of the Tax due by investment funds is the sum of the values indicated in range 5 of Annex I of this Law, according to the net asset value of each class of shares or, exclusively in the case of subdivision of share class, of each subdivision of class provided for in the fund's bylaws. § 2 The value of the Tax due by investment funds that do not present different share classes is that indicated in range 5 of Annex I of this Law, according to its net asset value. § 3 The net asset value referred to in §§ 1 and 2 of this article is calculated as follows: I – by the arithmetic mean of the daily net assets ascertained in the first quadrimester of the civil year; or II – based on the value calculated on the last business day of the first quadrimester of the year for those who did not ascertain the value of their net asset daily. § 4 The value of the Tax due by taxpayers of the other ranges provided for in Annexes I and V of this Law is indicated: I – according to the net asset value of the taxpayer on December 31 of the previous year; or II – by the lowest tax value provided for in the range applicable to the taxpayer, in the case of a participant constituted subsequently. § 5 In the cases provided for in Annex II of this Law, the initial collection must occur within 30 (thirty) days, counted from the date of registration with the CVM. § 6 In the cases provided for in Annex III of this Law, the value of the Tax is calculated according to the number of establishments of the taxpayer. § 7 In the cases provided for in Annex IV of this Law, the
value of the Tax is calculated based on the value of the public offering expressed in reais. § 8 In the case of the same legal person obtaining more than one registration in accordance with the provisions of Annexes I, II or III of this Law, the value of the Tax is due for each registration granted to the taxpayer. § 9 There will be no overlap or double taxation of the Tax in the case of a public offering of securities concomitant with the initial registration request as an issuer of securities, a situation in which tax incidence will occur only in accordance with Annex IV of this Law. 5 Art. 5. The Tax must be collected: I – in the cases provided for in Annexes I, II and III of this Law, until the last business day of the first decade of the month of May of each year; II – in the cases provided for in Annex IV of this Law: a) with the protocolization of the registration request with the CVM, in the case of a public offering subject to registration; or b) with the successful closure of the public offering of securities to the market, in the case of an offering exempt from registration; and III – in the case provided for in Annex V of this Law, with the protocolization of the initial registration request with the CVM as a participant

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL
Rua Sete de Setembro, 111/2-5th and 23-34th Floors – Center – Rio de Janeiro - RJ – ZIP: 20050-901 – Brazil Tel.: (21) 3554-8686 - www.cvm.gov.br

6. The CVM Tax will be due:

i) Registration Tax: upon the initial registration request as a participant in the securities market, as provided for in Law No. 7.940/89, or the issuance of an equivalent authorizing act, in the case provided for in Annex V, pro rata payment not admitted and with full payment of the Tax regardless of the date of the request;

ii) Annual Tax: annually and paid in full with respect to the entire year to which it refers, according to the values expressed in reais and established in Annexes I, II and III of Law No. 7.940/89, pro rata payment not admitted; and

iii) Offering Tax: upon the realization of a public offering of securities, including the cases of exemption from registration by the CVM, with incidence on the value of the operation, as established in Annex IV of Law No. 7.940/89.

IV) Registration Tax

IV.1) Registration Activity

7. The Registration Tax has as its primary objective that taxation be based on the CVM’s registration activity, backed by the concept of tax generating event contained in article 2 of Law 7.940/896 (namely, the police power attributed by law to the Authority).

8. All agents operating in the securities market indicated in Annexes I, II and III, of Law 7.940/89 are taxpayers of the Registration Tax.

9. As stated above, this type of tax (registration) is distinct from the periodic supervision tax, so there is no question that the payment of one tax is an advance, even if partial, of the payment of the other. Thus, upon the initial registration request with the CVM as

or the issuance of an equivalent authorizing act. § 1 The Tax not collected within the established period will be updated on the date of effective payment with the following additions: a) (revoked); b) (revoked); c) (revoked). I – interest on delay equivalent to the Special Settlement and Custody System (Selic) reference rate, in the administrative or judicial sphere, counted from the month following the due date and calculated in accordance with the legislation applicable to federal taxes; II – late fee, calculated in accordance with and in the manner of the legislation applicable to federal taxes; and III – charges of 20% (twenty percent), substitutive of the debtor's condemnation in attorney's fees and calculated on the total of the debt registered as active debt, which will be reduced to 10% (ten percent) if payment is made before the filing of the execution. § 3 The values established in Annexes I, II and III of this Law are due in full by taxpayers registered with the CVM for a period of less than 365 (three hundred and sixty-five) days in the year of competence of the tax. § 4 In the case of the offerings referred to in item “a” of item II of the caput of this article: I – when the value of the operation depends on a pricing procedure, the Tax must be collected based on the amount provided for in the fundraising that guided the decision to carry out the offering, and any complement of the Tax must be collected, upon registration of the offering, if the value of the operation exceeds the forecast; and II – reimbursement of the Tax is not applicable in the case of withdrawal of the offering. 6 Art. 2. The Tax generating event is the exercise of the police power legally attributed to the Securities and Exchange Commission - CVM. Sole paragraph. The CVM, within the scope of its competencies, may issue normative acts to regulate the applicability of the Supervision Tax provided for in this Law.

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL
Rua Sete de Setembro, 111/2-5th and 23-34th Floors – Center – Rio de Janeiro - RJ – ZIP: 20050-901 – Brazil Tel.: (21) 3554-8686 - www.cvm.gov.br

participant in the securities market, 25% of the value of the applicable annual tax must be collected based on the classification criteria provided for in Annexes I, II and III of Law No. 7.940/89.

10. Furthermore, the wording of article 4, item V, of Law 7.940/897, by using the expression “equivalent authorizing act”, aims to cover the registration activity related to those regulated entities that do not go through a formal registration process with the CVM, but who need the action of this Authority to be considered agents participating in the capital markets regulated by the authority.

11. In this sense, the Authority determines, in its regulatory policy, which participants must submit to the formalization of a registration request and which, among these, can have a simplified or automatic registration procedure, dispensing only the stage of documentary compliance analysis, but without dispensing with the action of the Authority so that they are considered agents of the securities market.

IV.2) Time of payment of the Registration Tax

12. The Registration Tax is due within 30 calendar days counted from the registration request, as a general rule. This deadline stems from the subsidiary rule of article 160 of the National Tax Code8. As this is a case of subsidiary application of the general tax rule, nothing prevents, of course, that its application be set aside whenever there is any specific CVM normative provision to the contrary.

13. We emphasize that the CVM uses the Febraban standard for issuing GRU (payment slips), which is why its issuance always provides for the payment due date to be the last day of the month in which it was generated. However, this due date does not coincide with the deadline provided for the payment of the Registration Tax itself, which will always be 30 days. That is, it is sufficient to generate the slip when the month begins so that the slip's due date coincides with the legal deadline defined by law.

14. For example, when opening an investment fund on May 29, it is recommended that the GRU be generated at the beginning of June, as the CVM system is not customizable to the point of allowing the configuration of the correct due date. In this sense, according to the example, the tax must be paid by June 29. If the GRU is generated in May, the institution may/must generate a second GRU in June to avail itself of the full deadline. It is up to the participant to control the 30 calendar days.

V) Annual Tax

7 Art. 4. The Tax is due: (...) V - upon the initial registration request as a participant in the securities market, as provided for in this Law, or the issuance of an equivalent authorizing act, in the case provided for in Annex V of this Law, pro rata payment not admitted and with full payment of the Tax regardless of the date of the request. (...)

8 Art. 160. When tax legislation does not fix the time of payment, the credit due date occurs thirty days after the date on which the passive subject is considered notified of the assessment.

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL
Rua Sete de Setembro, 111/2-5th and 23-34th Floors – Center – Rio de Janeiro - RJ – ZIP: 20050-901 – Brazil Tel.: (21) 3554-8686 - www.cvm.gov.br

V.1) Annual Tax – Investment Funds

15. Investment Funds, unlike other participants in the securities markets, have specific regulation provided for in article 4, paragraphs 2 and 3, of Law 7.940/899.

16. As can be seen from the wording of item I of paragraph 3, the calculation of net asset value, for funds with daily net asset value assessment, is done by the arithmetic mean of the values obtained daily over the first quadrimester of the year.

17. Obviously, the wording of said item contemplates the maximum assessment period, considering the ideal situation in which the investment fund was created prior to the quadrimester and is operating throughout it.

18. Finally, by legislative choice, the incidence of the Annual Tax in the first year was not determined for investment funds registered after the 1st quadrimester. Furthermore, in the case of funds registered after the 1st quadrimester and closed in the same year, there will also be no incidence of the Annual Tax.

V.1.1) Annual Tax – Investment Funds – Classes and Subclasses

19. The classes brought in the new structure being proposed for investment funds through Public Hearing 08/20 (“New Standard”) provide for mandatory separation of assets, and thus are different from classes, for example, currently seen in Credit Rights Investment Funds (“FIDC”), where all share the same common asset (the FIDC portfolio, in the case).

20. Thus, the general understanding is that the application of § 1, Art. 4 of said Law refers to funds that have several classes and subclasses, and the application of § 2, Art. 4 of said Law refers to single-class funds, which leads to the understanding that we will have similar results in the final computation of the tax.

V.1.2) Annual Tax – Investment Funds – Deferral

21. Regarding the deferral of the Annual Tax, the logic of calculation and payment established by MP 1.072/21 must be considered, so that the most adequate solution is to appropriate the payment of the Annual Tax for the entire civil year (since the competence of this tax is annual and refers to this

9 Art. 4. The Tax is due: (...) § 2 The value of the Tax due by funds that do not present different share classes is that indicated in range 5 of Annex I, according to its net asset value. § 3 The net asset value referred to in §§ 1 and 2 will be calculated as follows: I – by the arithmetic mean of the daily net assets ascertained in the first quadrimester of the civil year; or II – based on the value calculated on the last business day of the first quadrimester of the year for those who did not ascertain the value of their net asset daily. (...).

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL
Rua Sete de Setembro, 111/2-5th and 23-34th Floors – Center – Rio de Janeiro - RJ – ZIP: 20050-901 – Brazil Tel.: (21) 3554-8686 - www.cvm.gov.br

period), based on an estimate of the average net asset value of the fund during the first quadrimester of each year and, for the remaining period until the end of the year, based on the effective reference net asset value then already known.

V.1.3) Annual Tax – Investment Funds – Zero or Negative Net Asset Value

22. If the fund is created or closed during the first quadrimester, article 4 of Law 7.940 already provides the solution, which is to perform the arithmetic mean of the period in which the fund operated within the quadrimester.

23. Thus, for example, the mean should be calculated for the period, within the quadrimester, in which the fund operated. If its activities begin on 02/01/2022, the mean of its net asset value between this date and 04/30/2022 should be calculated. Similarly, if the fund closes its activities on 02/28/2022, the mean will weigh net asset values from 01/01/2022 to 02/28/2022.

24. Funds registered with the CVM that present zero or negative net asset value throughout the 1st quadrimester must collect the Annual Tax at the lowest value of the table in which they are classified, as well as pre-operational investment funds are equally obligated to collect at the lowest value contained in Annex I of Law 7.940.89.

V.1.4) Annual Tax – Investment Funds – Closure of Activities

25. The closure of the fund's activities refers to the day of the effective closure of its registration with the CVM. That is, all days with reported net asset value will be considered for the purpose of calculating the value due of Annual Tax, regardless of whether the asset is zero or not.

V.1.5) Annual Tax - Investment Funds - Pending Closure

26. There are 2 situations regarding the liquidation of investment funds:
    (1) forced liquidation by external factor, i.e., provoked by third parties (from outside to inside), such as in the example of CVM determination, or the resignation or extrajudicial liquidation of the administrator without another definitive administrator replacing it; and (2) ordinary liquidation, that determined by the unitholders, either through total redemption of shares, or by deliberation in an assembly.

27. The two situations deserve differentiated treatment. In scenario ‘1’, no new Annual Tax would be charged if the liquidation extends beyond the turn of the year. On the other hand, in scenario ‘2’, a fund whose closure process begins at the end of the year must pay the Annual Tax in the following year, if not closed by 12/31.

V.2) Annual Tax – Other Participants Supervised by SIN and SSE

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL
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28. Once the initial registration as a securities market participant is granted, or an equivalent authorizing act is issued, the value applicable to the new participant, provided for in Annexes I, II and III of Law 7.940/89 (except for investment funds registered from May to December that do not have net equity value in the first quadrimester of the year of registration), shall be due in full in the year of such concession.

29. The payment of the Annual Tax for these participants shall always occur within 30 days after obtaining the registration, in accordance with art. 5, § 4, of Law 7.940/89.

30. For service providers who are registered after the end of the first quadrimester of each year, there is no incidence of this first Annual Tax, in accordance with the rationale already explained for investment funds in item 18 above.

V.3) Annual Tax - Cancellation or Suspension of registration with CVM

31. From 01.01.2022, as provided for in art. 5, §3 of Law 7.940/89, the values established in Annexes I, II and III shall be due in full by taxpayers registered with the CVM for a period of less than 365 (three hundred and sixty-five) days in the year of competence of the tax.

32. It is important to highlight that when it concerns a registration suspended by an administrative act of the CVM, the Annual Tax will remain due.

33. The taxpayer of the Annual Tax, whether natural or legal person, classified in Annexes II and III, who, for its own convenience, does not exercise or has ceased to exercise the activity, continues to be a taxpayer of the Annual Tax, because the taxable event of the tax arises with the registration with the CVM, persisting until the moment in which the interested party has its request for cancellation or suspension approved (art 2 of Law 7.940/89).

V.5) Annual Tax - Zero or Negative Net Equity

34. The taxpayer is obliged to pay the Annual Tax and shall use the value referring to the first bracket of net equity of the respective table contained in Annex I of Law 7.940/89.

VI) Non-resident investor

35. Law 7.940/89, even after the changes of Provisional Measure 1.072/21, continues to tax the portfolios of non-resident investors (and not the investors directly).

36. Thus, the qualification of this investor as a legal or natural person does not affect the taxation of the portfolio to which these investors belong. That is, the taxpayer is neither the non-resident investor nor its representative, but rather the "holder of own account or collective portfolio" (the portfolio), with no mention in the list of art. 3 of Law 7.940/89 of the representative as a taxpayer. The representative of the NRI is only responsible for the tax payment (§2, art. 3 of Law 7.940/89).

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL
Seven of September Street, 111/2-5th and 23-34th Floors – Center – Rio de Janeiro - RJ – ZIP: 20050-901 – Brazil Tel.: (21) 3554-8686 - www.cvm.gov.br

37. Furthermore, it is worth noting that with the exemption of registration for natural persons at the CVM, these are not debtors of the Annual Tax, since they do not compose the net equity of the portfolio that is the tax base.

38. We remind you that the very requirement to include natural persons in portfolios of non-resident investors arises solely and exclusively from the need, still present, of using an operational code by this investor to operate in the market, which depends on this inclusion to be generated. As soon as the market adapts to the non-existence of this code, its granting will be discontinued and its inclusion in any account will no longer be requested.

VII) Inspection Tax incident on public offerings of investment fund shares

40. In the event of a public offering of investment fund shares, the Offering Tax must be paid:

a) with the filing of the registration request with the CVM, in the case of public offerings subject to registration; or

b) until the date of closing of the public offering of shares to the market, in the case of offerings exempt from registration.

41. Regarding item 'b', it is important to clarify that the closing date is not confused with the settlement date of the offering. The closing date of the offering is not a rigid date stipulated in regulations, and may be subsequent to the settlement date of the offering, provided that the structure of the offering has provision for compliance with specific and inherent stages that exceed the settlement date.

42. There will be no overlap or double taxation of the Inspection Tax in the event of a public offering of securities concomitant with the initial registration request as an issuer of securities, including investment funds, as provided for in Annex V of Law No. 7.940/89 amended by Law No. 14.317/2022. In this situation, there will be incidence of tax only referring to the registration of the offering, that is, in accordance with Annex IV of the Law.

43. Finally, we highlight that the other clarifications regarding Public Offerings, including investment fund shares, have already been brought by Circular Letter No. 1/2022-CVM/SRE.

Sincerely,

Digitally signed by
DANIEL WALTER MAEDA BERNARDO
Superintendent of Institutional Investor Supervision

Digitally signed by
BRUNO DE FREITAS GOMES
Superintendent of Securitization Supervision