On March 15th, 2016, the normative ruling n. 1627/2016 has been published on the Brazilian of cial gazette, latter de ning the Regime Especial de Regularização Cambial e Tributária (“RERCT”).
Such regime foresees the possibility of regularizing foreign assets and rights held by Brazilian taxpayers off-shore and undeclared to Brazilian Tax Authorities. Said assets can be part of the voluntary disclosure program if held abroad until December, 31st 2014.
An essential requirement for being eligible to the RERCT’s provisions is the lawfulness of the foreign assets, i.e., the rights or assets to be regularized shall have been acquired by licit means and the respective source will be declared by the taxpayer when adhering to the special regime.
The overall assets abroad will be subject to 15% at taxation on the amount held on December, 31st 2014; said tax increased by additional 100% penalty, totalizing, thus, an effective tax “cost” equal to 30%.
The exchange rate to be retained for the investments held in foreign currencies is the Brazilian Real/ USD one at the date of the December 31st, 2014, i.e. 2,65.
The combined effect of taxes, penalties and exchange rate reduces the effective cost of the voluntary disclosure in percentage to the assets.
The voluntary disclosure procedure is accessible from the 4th of April 2016 to the 31st of October 2016.
Brochure – Brazilian Voluntary Disclosure