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Brazil: Developments impacting all businesses


Brazil has been busy with issuing new tax guidance, committing to tax objectives with partner nations and preparing a comprehensive tax reform bill.






Tax authorities release guidance on the disclosure of final beneficiaries in Brazilian corporate taxpayer register

The Brazilian tax authorities (RFB) issued Normative Instruction (NI) No. 1729/2017 on August 15 2017, which updates the obligation to disclose the final beneficiaries in the corporate taxpayer register.

By way of background, NI No. 1634/2016 established the obligation to disclose information related to final beneficiaries in the corporate taxpayer register (CNPJ). According to the legislation, the term "final beneficiary" refers to:

  • An individual who ultimately, either directly or indirectly, holds, controls or significantly influences an entity; or

  • An individual on whose behalf a transaction is undertaken.

A shareholder is deemed to have significant influence if the individual:

  • Owns, directly or indirectly, more than 25% of the entity's capital stock; or

  • Has the ability to influence the decision-making and elect or appoint members of the entity's management.

NI No. 1.729/2017, recently issued, clarifies that the disclosure of the final beneficiaries can be made up to 90 days from the date of the register in the CNPJ (this term may be extended for another 90 days upon request) and that the supporting documentation should be submitted online.

Foreign entities registered in Brazil before July 1 2017 will have until December 31 2018 to comply with the disclosure obligation and submit the supporting documents. Note that if an entity updates its CNPJ before December 31 2018 for any other reason, the disclosure obligation will arise at the date of such a change.

BRICS sign memorandum of cooperation in tax matters

The heads of the tax authorities of the five countries that form the BRICS (Brazil, Russia, India, China and South Africa) signed a Memorandum of Cooperation in Tax Matters on July 27 2017.

This landmark document shows the commitment of the countries to implement the G20 tax agenda, including the BEPS project and the automatic exchange of information, in order to foster economic growth and counteracting tax avoidance and aggressive tax planning.

Note that, over the past year, Brazil has introduced tax rules to comply with the BEPS minimum standards and it has recently filed a request to become a member of the OECD.

Brazil discusses comprehensive tax reform bill

The Brazilian Representative Luiz Carlos Hauly presented to the President and his ministers a bill for a comprehensive tax reform on August 22 2017 that foresees the end of 10 taxes in Brazil.

According to the bill, the ICMS (state VAT on sales and certain services), ISS (municipal service tax), IPI (federal excise tax), COFINS (federal social contribution on billing), PIS/PASEP (federal contribution to the social integration programme), CIDE (federal contribution for intervention in the economic domain), IOF (tax on financial operations) and the Salário-Educação (educational allowance) will be consolidated into a new tax (a VAT), whereas the CSLL (federal social contribution on net income) will be absorbed by the IRPJ (Brazilian corporate income tax).

In addition, a selective tax will be created to be levied on products of seven industries: electric power, fuels, telecoms, tobacco, beverages, automobiles, tires and auto parts.

This comprehensive project of tax reform is expected to involve approximately 11 bills and a proposal for an amendment to the Constitution.

The bill is expected to be presented for debate in the Congress shortly.

Fernando Giacobbo ( and Ruben Gottberg (



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