CMN Resolution No. 4680 — Provisions on the Calculation of Principal Capital of Reference Equity under Resolution No. 4,192 of March 1, 2013

The Central Bank of Brazil, in accordance with Article 9 of Law No. 4,595 of December 31, 1964, makes public that the National Monetary Council, in a session held on July 31, 2018, based on Article 4, items VIII and XI, of the aforementioned Law, Article 20, § 1, of Law No. 4,864 of November 29, 1965, Law No. 6,099 of September 12, 1974, and Articles 1 and 12 of Complementary Law No. 130 of April 17, 2009,

R E S O L V E S:

Art. 1 Financial institutions and other institutions authorized to operate by the Central Bank of Brazil may refrain from deducting from the Principal Capital, as provided in Resolution No. 4,192 of March 1, 2013, the tax credits from fiscal losses resulting from a short position in foreign currency executed with the objective of providing a hedge for their participation in investments abroad.

§ 1 The short position referred to in the main text may consider the value necessary to provide effective protection for the aforementioned investment abroad, including the computation of fiscal effects.

§ 2 The provisions of the main text apply only to tax credits recognized in the period from January 1, 2018, to December 31, 2019.

Art. 2 The tax credits referred to in Article 1 must be deducted from the Principal Capital according to the following schedule:

I - at least 50% (fifty percent), by June 30, 2020; and

II - 100% (one hundred percent), by December 31, 2020.

Art. 3 This Resolution enters into force on the date of its publication.

                   Ilan Goldfajn  
                  President of the Central Bank of Brazil