International Tax Review is part of the Delinian Group, Delinian Limited, 8 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2023

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Brazil: Update on the obligation to disclose certain transactions in Brazil

Oliveira-Julio
Gottberg-Ruben

Julio Oliveira

Ruben Gottberg

On November 17 2015, the Brazilian Congress approved the project for conversion into law of the Provisional Measure 685/2015 (PM 685/2015), without the articles intended to impose an obligation to disclose tax planning transactions.

PM 685/2015 was released by the Brazilian government on July 21 2015 and introduced, among other provisions, rules concerning the disclosure of certain transactions to the Brazilian Internal Federal Revenue Service (RFB).

In Brazil, a PM is a temporary executive order issued by the executive branch of the government. A PM has the authority of law, but it requires formal conversion into law by the Congress within a 60-day term. If Congress does not act within this initial term, then the measure expires unless extended for an additional 60-day term (such extension can only occur once). On September 9 2015, the Brazilian Congress extended the PM 685/2015 for an additional 60-day term (no further extensions are now permitted).

During the legislative process for converting PM 685/2015 into law, the legislators considered imposing an obligation to disclose tax planning operations resulting in suppression or reduction of taxes.

After extensive discussions involving the legality of tax planning in Brazil and the extension of RFB's powers, which is evidenced by repetitive moving back and forth between the upper and the lower chambers of the Congress, the law project was approved on November 17 2015. Interestingly, the final draft was approved without the articles intended to impose an obligation to disclose tax planning transactions.

The newly converted law will now be submitted for Presidential assent, which may only veto or approve it, without the possibility to reintroduce the provisions excluded by the Congress.

Julio Oliveira (julio.oliveira@br.pwc.com) and Ruben Gottberg (ruben.gottberg@br.pwc.com)

PwC

Tel: +55 11 3674 2276

Website: www.pwc.com.br

more across site & bottom lb ros

More from across our site

Premier League football clubs are accused of avoiding paying up to £470 million in UK tax, while Malta is poised to overhaul its unique corporate tax system.
Bartosz Doroszuk of MDDP offers insights on Poland’s new tax legislation on shifted profits, as the implementation deadline looms nearer.
Four tax specialists preview the UK’s transfer pricing requirements, which come into effect on April 1.
The rise of the QDMTT will likely change how countries compete on tax and transfer pricing policy, but it may not reverse decades of falling corporate tax rates.
ITR’s latest quarterly PDF is going live today, leading on the EU’s BEFIT initiative and wider tax reforms in the bloc.
COVID-19 and an overworked HMRC may have created the ‘perfect storm’ for reduced prosecutions, according to tax professionals.
Participants in the consultation on the UN secretary-general’s report into international tax cooperation are divided – some believe UN-led structures are the way forward, while others want to improve existing ones. Ralph Cunningham reports.
The German government unveils plans to implement pillar two, while EY is reportedly still divided over ‘Project Everest’.
With the M&A market booming, ITR has partnered with correspondents from firms around the globe to provide a guide to the deal structures being employed and tax authorities' responses.
Xing Hu, partner at Hui Ye Law Firm in Shanghai, looks at the implications of the US Uyghur Forced Labor Protection Act for TP comparability analysis of China.