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Brazil: Provisional Measure 685/2015 extended for another 60-day period


Julio Oliveira

On July 21 2015, the Brazilian Government issued the controversial Provisional Measure (PM) 685/2015 which, among other provisions, provides for new rules concerning the disclosure of certain transactions to the Brazilian Internal Federal Revenue Service (RFB). Broadly, PM 685/2015 provides that the following types of transactions occurring in the previous year should be disclosed to the RFB by September 30:

  • Actions or operations that cannot be explained by relevant commercial, business or economic motivations;

  • Actions where the form of the transaction is unusual, uses indirect operations or specific contractual clauses to recharacterise (in whole or in part) the typical contract; or

  • Actions or operations explicitly provided for in a future Act to be issued by the RFB.

The form and conditions for making this disclosure still need to be regulated by the RFB.

In Brazil, a provisional measure is a provisionary law issued by the executive branch of the Brazilian Government, which has the authority of law until it is acted upon by the Brazilian Congress within a prescribed 60-day period. If Congress does not act within this initial period then the measure expires, unless it is extended for an additional 60-day period. On September 9 2015 the Brazilian Congress extended the PM 685/15 for the additional 60-day period.

PM 685/2015 has already generated substantial debate in Brazil. There has been particular concern surrounding the potentially broad application of the rules as well as the lack of regulation and guidance accompanying the provisions. This concern seems to have been heard by the RFB, which has confirmed: "The intention was to start charging the declaration this year. However, as the PM is under discussion in Congress and will need further clarification, only after we have a final version will we standardise it and make it mandatory."

The RFB also advised that following the discussion in the Brazilian Congress, the RFB will still open the regulations for the declaration for public consultation. As the Measure has apparently already received more than 200 amendments in the Brazilian Congress the RFB considered it more prudent to wait to provide greater legal security to everyone.

Recently, a legal entity incorporated in São Paulo State obtained a preliminary injunction exempting it from the provisions of the PM 685/2015 by challenging its constitutionality. To date, the final decision in relation to this dispute has not been issued.

Brazilian taxpayers should continue to monitor the developments of the PM's conversion into law.

Julio Oliveira (, São Paulo


Tel: +55 11 3674 2276


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