Maintenance of its structure

Annual Report

Companies registered in the United States need to submit the Annual Report, or annual renewal report,to maintain an active status and update the company’s data, avoiding more severe fines and penalties.

Theannual renewal report must be submitted to the government of the State where the company is registered. The greater or lesser complexity of the annual renewal report depends on the state where the company is registered and also the type of company. Basically, in the document, there are fields to enter basic information about the company, such as address, shareholding composition, number of employees, contact e-mails and phone numbers.

Each state establishes a deadline for submission and the collection of a fee to update the company’s registration.

BEA Surveys

The questionnaire forms of the Bureau of Economic Analysis of the United States’ Department of Commerce seek to collect information about companies with a minimum 10% foreign interest in the share capital. in the share capital. Among the data that must be declared are those referring to billing, the corporate and functional structure and the company’s results. There are different types of BEA Surveys, some are delivered annually presenting data for the previous fiscal year, others, depending on the company, must be delivered quarterly.

5472

The purpose of the 5472 Form is to prevent foreigners from evading USA taxes and close a few gaps that exist in the Internal Revenue Code.

IRS instructions for the 5472 Form: https://www.irs.gov/instructions/i5472

1099

The 1099 formreports the consolidation ofpayments made to external service providers who received over USD 600 over the course of the fiscal year.

In it wages, salaries or tips — which must be reported through theW-2 form.

5471

Certain USA citizens and residents who are executives, officers or shareholders of certain foreign companies must fill out the 5471 form as part of their expat tax return.

8868

The 8868 form is used by an exempt organization to request the automatic 6-month extension to fill out the tax return.

Main tax liabilities in Brazil

Final Beneficiary Statement

Final beneficiary is the natural person who:

  • Directly or indirectly holds over 25% of the entity’s capital;
  • Directly or indirectly exercises predominance in corporate resolutions and the power the elect the majority of officers, even if without controlling it; or
  • On behalf of which a transaction is conducted.

Regarding the deadline for the submission of the Statement, we have two scenarios: if the foreign company has no final beneficiary, it must inform such status to the Internal Service within 90 (ninety) days as from its registration date; it is also required to report whenever there is a change of the final beneficiary regarding the reporting entity.

Close attentionshould be given to the submission deadline, since the legal entity that fails to inform the final beneficiary will be subject to administrative fine and suspension of the corporate taxpayer identification number.

RDE-IED/RDE-ROF

Statements pertaining to the record of operations in the central Bank for the receipt and remittance of funds abroad as described below:

  • RDE-IED – Statement for legal entity that received foreign investment in Brazil;
  • RDE-ROF – Statement for legal entity that has taken any type of international credit.

Thedeadline for the submission of statements for registration in the RDE-IED and RDE-ROF systems is the same: up to 30 days as from the triggering event.

DEF – Economic and Financial Statement

The DEF is an accessory obligation of the Central Bank of Brazil to update the information of the shareholding structure of national companies that is submitted at two frequencies:

  • Quarterly – For companies that received foreign direct investment and that have assets or equity equal to or greater than R$250 million. The deadline for submitting the declaration is always on the last working day of the quarter following the quarter of competence. For example: the DEF for the 1st quarter of 2021 must be delivered by 06/30/2021;
  • Annual – Brazilian companies with direct participation of foreign investors in the corporate structure and shareholders’ equity below R$ 250 million. The deadline for submitting the declaration is always on the last business day of the quarter following the year of accrual. For example: the DEF for 2020 must be delivered by 03/31/2021.

Attention must be paid to the deadline for the submission, since the fine may vary depending on the delay time:

  • Submission after the deadline: 1% of the amount subject to registration limited to BRL 25,000.00
  • Fine for failure to submit: 5% of the amount subject to registration limited to BRL 125,000.00
  • Fine for false information: 10% of the amount subject to registration limited to BRL 250,000.00.

CBE – Statement of Brazilian Capitals Abroad

CBE is an accessory obligation for companies that have invested capital equal to or higher than:

  • USD 1,000,000 for annual declaration. With delivery deadline on April 5 of the following year;
  • USD 100,000,000 to deliver the quarterly statement. For the base date of March 31st, the declaration must occur by June 5th following the base date. With base date of June 30 and September 30: until September 5 and December 5 following the base date respectively.

Finesfor failure to submit the statement, or the other scenarios provided for in the legislation, vary from BRL 2,500.00 to BRL 250,000.00, and may be increased by 50% in some cases.

Census of Foreign Companies in Brazil

Refers to the accessory obligation to be sent to the Central Bank of Brazil, which aims to collect information on foreign direct investments and foreign debt instruments. We have two modalities for submission of the Census of Foreign Companies in Brazil, which must be submitted by August 16, 2021:

  • Quinquennial – Submitted in years ending in 0 or 5.
  • Annual – Submitted in years not ended in 0 or 5;

Who is required to submit the annual census?

  • Legal entities headquartered in the country, with direct equity interest of non-residents in its share capital, in any amount, and with net equity equal to or higher than US$ 100 million on the base-date of December 31 of the base-year;
  • Investment funds with non-resident shareholders and net equity equal to or higher than US$100 on the base-date of December 31 of the base-year, through its directors; and
  • Legal entities headquartered in the country, with total debit balance of short-term trade credits (due in up to 360 days) granted by non-residents, equal to or higher than US$ 10 million, on the base-date of December 31 of the base-year.

Who is required to submit the quinquennial census?

  • Legal entities headquartered in the country, with direct equity interest of non-residents in its share capital, in any amount, on the base-date of December 31 of the base-year;
  • Investment funds with non-resident shareholders on the base-date of December 31 of the base-year, through its directors; and
  • Legal entities headquartered in the country, with total debit balance of short-term trade credits (due in up to 360 days) granted by non-residents, equal to or higher than US$ 1 million, on the base-date of December 31 of the base-year.

Declaration on the Use of Resources in Foreign Currency Arising from Receipt of Exports (DEREX)

With DEREX’s extinction, the information previously provided thereby must be provided in 2021 through the following means:

  • Legal Entities that opt for the Simplified Taxation System: via National Collection system;
  • Other Legal Entities: through specific block of Tax Accounting Bookkeeping (ECF);
  • Natural Persons: via Annual Income Tax Return of the Individual Income Tax (DIRPF).

Information pertaining to DEREX must be provided in Block V of the ECF.

Foreign Investments Country-by-Country Statement (DPP)

Entities required to submit the DPP:

I – R$ 2,260,000,000.00 (two billion, two hundred and sixty million reais), if the final controller is a resident in Brazil for tax purposes; or

II – € 750,000,000.00 (seven hundred and fifty million euros), or equivalent converted at the exchange rate of January 31, 2020 to the local currency of the jurisdiction of residence for the final controller’s tax purposes.

Entities exempt from submitting the DPP:

a) Identify, via completion of ECF’s W100 Form, the final controller of the multinational group (the entity itself can be the final controller of the group);
b) Report to the RFB, in ECF’s W100 Form, that the multinational group falls within the scope of DPP submission exemption status.

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