Double taxation on investments and financial investments

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Double taxation is a recurring theme within the investment market. This concern exists mainly when it comes to the distribution of profits, interest and royalties to shareholders and investors of a company. As the company pays taxes on its income, it is considered that taxation is already all done at source. Therefore, when distributing a portion of the profit in the form of dividends to its shareholders, it is presumed that they should not pay Income Tax on what was received. This is because if the company and the individual were taxed for the same dividend, the tax would be charged twice - which would be considered double taxation. Due to this logic, the double taxation on profits and dividends on individuals was extinguished in Brazil, through Law 9249/1995. However, this determination is far from being a consensus. There is now a big debate on the subject, where several economists and law experts are arguing for the return of dividend taxation on the individual.

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