Financial Investment by Quotas (Financial Process Script - SIGAFIN)

Financial Investment by Quotas, or Investment Funds, has some important features described below to calculate income on investments made.

Most funds in the market offer daily liquidity, but IOF is charged on redemptions up to the 29th consecutive day from the date of each investment, according to the table below:

As of the 30th day, each investment is exempted from IOF.

Calculation of Investment Fund Income

To calculate the income, you must know the number of quotas into which the capital invested was transformed, that is, how many quotas comprise the capital.

The first step in calculation is to divide the investment amount by the value of quota on the investment day. The value of quotas is usually reported with 6 decimal places.

Example

R$ 10,000.00/R$1.263745 = 7,912.988775 quotas

The result displayed is the number of quotas.

The system uses the quota registered in the contract to make this conversion while adding an investment. Investments are controlled in quotas from the moment an investment is added.

Once you know the number of quotas, you must multiply it by the value of the quota of the day to know its balance.

Example:

Suppose that, after twenty five consecutive days, the quota has increased in value and now corresponds to $1.283459. The multiplication result is the updated investment, that is:

7,912.988775 x R$ 1.283459 = R$ 10,156.00

Calculation of Total Gross Income Obtained in the Period

To calculate the total gross income obtained in the period, the following calculations are made:

Consider a balance in quotas of 7,912.988775 multiplied by the quota of the last working day of the previous month, or the quota on the investment day:

7,912.988775 x 1.263745 = 10,000.00

Consider a balance in quotas of 7,912.988775 multiplied by the quota on the day of redemption or allocation minus the balance in item 1.

Calculation of Gross Income:

7,912.988775 x 1.283459 – 10,000.00 = R$ 156.00

To calculate the income proportional to redemption, the following calculation must be made:

The redemption value is obtained in quotas by dividing the redemption value by the quota of the day.

Example:

1,000.00 / 1.283459 = 779.144484 (considering the redemption of R$ 1,000.00)

The value in quotas obtained in item 1 is multiplied by the quota of the last working day of the previous month or by the quota on the investment date:

779.144484 x 1.263745 = 984.64

The value obtained in item 2 must be deducted from the redemption value to get the income value proportional to 1,000.00:

1,000.00 – 984.64 = 15.36

For better understanding, in partial redemption, the income is calculated by using cross-multiplication.

Example:

If 156.00 is the income on the updated 10,000.00, the income on 1,000.00 is:

X = ( 156.00 x 1,000.00 ) / 10,156.00 = 15.36

Where X = Income on partial redemption.

Calculation of IR (Income Tax) on Gross Income

While calculating Income Tax on gross income, the IR is collected by the Manager of the Investment Fund. Collecting always occurs on the last business day of the current month or at redemption, whichever is first.

If redemption is not made on the last working day of the month, the Administrator automatically debits its balance in quotas, equivalent to the IR amount due in the current month.

In case of a Fixed Income Fund, the tax rate is 20% on gross income, which must be paid to the Internal Revenue Service.

The IOF due is already deducted from the gross income if the redemption is effected within 30 consecutive days period.

Thus, the IR amount to be collected without IOF levy (redemption period starting from the 30th day after the investment) is:

$ 156.00 x 20% = 0.20 = $ 31.20

If there is no redemption till the end of the month, the balance of quotas on the last working day of the month is reduced as follows:

$ 31.20 divided by $ 1.283459 (quota of the last working day of the month) = 24.309308 quotas.

IOF Levy

Consider a redemption on the 25th day shall levy IOF of $ 24.96 and, in addition, IRF:

IRF = (156.00 - 24.96) = $ 131.04 multiplied by 20% = $ 26.21

To demonstrate the calculation method of final income and the net profitability of applicable taxes, redemption on the 25th day after investment is considered, with levy of IOF and IR.

Note: If the calculated IOF is during allocation (Virtual IOF), its value is added to the income of the following month because it was only used not to calculate IR on IOF in the first month and not to calculate a lower income and a lower IR in the following month.

Profitability Calculation:

a) Net Income

= Gross Income – IOF – IR = R$ 156.00 – R$ 24.96 – R$ 26.21 = R$ 104.83

b) Net Profitability

= Net Income divided by the initial amount invested x 100 = R$ 104.83 / R$ 10,000.00

= 1.05%, in a period of 25 consecutive days.

In the following month, the investment will be calculated using the quota of the last working day of the previous month and the quota of the allocation date.