REOPENING OF DEADLINE FOR REGULARIZATION OF ASSETS LOCATED ABROAD
The Senate approved and forwarded to the Chamber of Deputies Bill No. 405/2016, which grants a new term for application to the Exchange and Tax Special Regularization Regime (RERCT).
The RERCT, established in Law No. 13,254/2016, allows the voluntary filing of tax returns regarding resources, assets, or rights of lawful origin, undeclared or incorrectly declared, remitted, or held abroad, or repatriated, by individuals and legal entities resident or domiciled in the country.
th day after the release of the respective law.
Among other measures, the bill expands the “Asset Status Date” from 12.31.2014 to 06.30.2016, allowing the filing as tax returns of resources, assets and other properties that are or have been owned by the taxpayer until June 30, 2016.
In addition, the bill extends the application of RERCT to non-residents, if they have resided or have been domiciled in Brazil during any time between 12.31.2010 and 12.30.2016, and to those whose asset succession has been initiated until RERCT’s application date.
The taxpayers who join the RERCT during this new term shall pay the equivalent of 17,5% of the declared value, converted into Reais at the rate of R$ 3.21, as income tax (higher than the originally applied rate of 15%). Also, the taxpayer shall pay an administrative fine of 100% of the value of the due income tax.
Taxpayers who have joined the RERCT in the first round of tax returns will also be able to amend their original statement. In this case, the taxpayer shall pay the income tax and administrative fine based on the assets, which were not regularized in the first round of tax returns.
If approved by the Chamber of Deputies, the bill will need to be approved by presidential sanction, which shall occur within 15 working days of the Chamber’s approval. Once sanctioned and published, the new law will come to force, and the deadline for applying for the RERCT will be reopened after the 30th day following its release.
This is likely to be the last opportunity for the regularization of assets and rights located abroad, since Brazil has recently entered several international agreements for the exchange of fiscal and financial information, closing in on tax evasion and illegal capital flight.
The Corporate Department of Kestener, Granja & Vieira Advogados is available to provide any further information required on this subject.
This article is intended exclusively to provide information and does not contain any opinion, recommendation, or legal advice from KGV Advogados in relation to the matters herein addressed. Copyrights are reserved to Kestener, Granja & Vieira Advogados.
