ULTIMATE BENEFICIARY INFORMATION IN THE CNPJ

ULTIMATE BENEFICIARY INFORMATION IN THE CNPJ

The Normative Instruction No. 1634 has been issued by the Brazilian Federal Revenue Office (“RFB”), on May 6, 2016 (“NI 1634”), to update and add regulations on the Brazilian Corporate Taxpayers’ Registry (“CNPJ”), specially related to: (i) the “ultimate beneficiary”; (ii) the procedures applied when vices are evidenced in enrollment acts and updates of the CNPJ; (iii) the abridgement of procedures of incorporation and dissolution of companies; (iv) the requirement to report the Legal Entity Identifier (LEI) number, when applicable; among other changes.

As per NI 1634, the enrollments of Brazilian and foreign companies with the CNPJ shall comprise the complete corporate structure up to the ultimate beneficiary, i.e. individual who, ultimately, directly or indirectly owns, controls or significantly influences the relevant company or on whose behalf a transaction is conducted.

The referred requirement to inform the ultimate beneficiary is not applicable to publicly traded companies settled in Brazil or in countries where the public disclosure of all significant shareholders is required, as long as they are not incorporated in jurisdictions with favorable tax treatment or under beneficial tax regime (as provided by Law No. 9430/1996).

NI 1634 entered into force on June 1st, 2016, given that: (i) the obligation to inform the ultimate beneficiary and, for foreign companies, to present several documents to the RFB, begin on January 1st, 2017 to companies to be enrolled with the CNPJ as from such date; and (ii) companies already enrolled with the CNPJ before January 1st, 2017 shall inform the ultimate beneficiaries when they effect any change to their enrollments as from such date or up to the December 31, 2018

Failure to comply with the requirements provided for in NI 1634 may result in the suspension of the relevant enrollment with the CNPJ and in the prevention of the legal entity to effect transactions with Banks.

In case your company fits into any of the abovementioned circumstances, in a way that it shall suit to such new rules, the Corporate, Contracts and M&A team of Kestener, Granja & Vieira Advogados remains at your disposal 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.