Brazil amends tax legislation regarding foreign currency exchange (gains & losses)

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At the start of this month, Brazil published the new and amended Normative Ruling RFB 1,656/2016 in the Official Gazette.
This will amend Section 5, regarding the rules on the taxation of gains and losses on the foreign currency exchange.

This amendment will exclude the provision that restricted changes regarding the selected methodology taxpayers will use to apply to tax foreign currency exchange gains and losses. (I.e. accrual or cash methods) to instances where Brazilian Tax Authorities can recognise significant variations in cash flow.

This recognition will take place in the form of an Ordinance to be passed by the Brazilian Ministry of Finance. The new rulings will define whether a positive or negative variation is significant if it is greater than 10% of the sale rate of the US Dollar $ being published by the Central Bank in Brazil at that time.