The Normative Ruling of the Brazilian Internal Revenue Service n. 1.634/2016 determines that Brazilian companies that have a foreign member in their corporate structure must send their organization chart to the Internal Revenue Service by December 31, 2018.
What is Normative Ruling n. 1.634/2016?
This Normative Instruction was edited by the Brazilian Revenue to give more security to financial operations and make the fight against corruption and evasion of foreign exchange more efficient.
With the new requirements it becomes mandatory to identify the partners of the company to its Final Beneficiary.
Final Beneficiary is the individual who owns, controls or has a significant influence on the company — that is, the one who holds more than 25% of the voting capital of the entity or exercises the power to elect a majority of the company’s directors.
Who is required to provide this information?
- Entities that have registered with the National Registry of Legal Entities (CNPJ) until July 1, 2017;
- Entities that are registered since before July 1, 2017, but they made some cadastral change.
How should this information be provided?
Firstly, it should be informed who the final beneficiary(ies) is(are) . For this, use the Basic Entry Document (DBE), a form sent to the Brazilian Revenue Service through its electronic platform.
After analysis, all supporting documents of the final beneficiary (a “dossier”) must be presented as required by the Revenue.
What happens to those who do not fulfill this obligation?
The company may have its CNPJ suspended.
Drummond Advisors can help you regulate your situation. Send your email to firstname.lastname@example.org and we will contact you.