The Brazilian Ministry of Finance has issued an ordinance 427/2013, On 2 August 2013, which finally define and clarifies the interest rate spread and that was mentioned but not specified in Law 12.766/2012.
Under Ordinance 427/2013 where the taxpayer is the lending party a spread of 2.5% is to be added to the minimum interest rate. The result of the computation is the minimum income that must be recognized by the taxpayer, even in a situation where no interest was charged or the actual interest rate charged was lower than this minimum. In a situation where the taxpayer is the borrower of funds, Ordinance 427/2013 sets a maximum spread of 3.5% for purposes of calculating the tax deduction for interest. If the actual interest rate charged is lower than the total of the listed rate and the spread, the tax deduction would be restricted to the actual rate charged.
