Press Room: Tax Release
Brazilian Tax Authority Enacts Special Regime to Operate Offshore Voluntary Disclosure Program
On March 15, 2016 the Brazilian tax authorities enacted Normative Instruction 1627, which establishes the Special Regime for Tax and Exchange Regularization (Special Regime). In short, this is the Brazilian version of an Offshore Voluntary Disclosure Program.
The Special Regime allows the regularization of assets, rights and resources (originated from legal activities) not previously reported, or wrongfully reported in the past, that may have been remitted or kept abroad, or repatriated.
In order to adhere to the Special Regime one must file a Declaration of Tax and Exchange regularization (Declaração de Regularização Cambial e Tributária).
In addition, it is required to amend the 2014 Brazilian Income Tax Return and the 2014 Central Bank Report on foreign held assets (if applicable) which have been previously filed.
There will be a 30% payment due levied as follows: 15% Income Tax and 15% Penalties on the amounts which were not reported.
Amounts of up to BRL 10,000 (ten thousand Brazilian Reals) are exempt of the penalty charge, but will be subject to 15% Income Tax, nonetheless. It is not required to transfer the amounts to Brazil. Public office holders or employees, or their relatives, are not eligible to adhere to the Special Regime.
The Filing Period
The filing period extends from April 4, 2016 to October 31, 2016.