08/01/2019 17:34:08513 visualizações
The deadline to inform the Ultimate Beneficial Owner of Brazilian and foreign companies operating in the country was extended by the Normative Instruction nº 1863/2018, issued by the Brazilian IRS (RFB). The new deadline expires on June 24, 2019. Companies that do not comply with this registration will have their Tax Identity Number (CNPJ) suspended and will be prevented from carrying out transactions with Brazilian banking institutions.
1. Who is Considered an Ultimate Beneficial Owner?
The Ultimate Beneficial Owner is the individual (a natural person) who (a) owns more than 25% of the entity’s shares, directly or indirectly, or (b) holds or exercises the preponderance of corporate decisions and has the power to elect the majority of the administrators of the entity, even if it does not control it.
Prior to this Normative, only direct members of each entity were informed to the Brazilian IRS, with no need to inform the whole chain of shareholders up to the natural person (ultimate beneficial owner).
2. Who is Obligated to Inform the Ultimate Beneficial Owner?
companies incorporated in Brazil;
clubs and brazilian investment funds;
foreign companies that owns rights over real property, vehicles, ships, aircraft, bank accounts, financial investment in the stock market or equity in Brazilian companies and/or perform external financial leasing, equipment rental and chartering of vessels for special transportation, importation of goods without exchange coverage as contribution to the share capital;
foreign-based banks that trades foreign currencies with Brazilian banks; and
silent partnerships (Sociedade em Conta de Participação - SCP).
Foreign companies that are obliged to report should also report to Brazilian IRS even in the case none of their shareholders fit the ultimate beneficial owner concept.
3. When is the Deadline?
The reporting shall be done until June 24, 2019.
4. What is the Penalty for not Reporting on Time?
Tax Identity Number (CNPJ) suspension and impediment to transact with Brazilian banking institutions, including checking account transactions, financial applications and loans.
There are many Brazilian companies and foreign investors that have a highly complex corporate structure, therefore, the disclosure of all this information to RFB can be a challenging situation that must be faced with due anticipation.
The International Transactions Team will be available to provide the necessary clarifications in this process.