BENEFICIAL OWNER DECLARATION IN BRAZIL
BRAZILIAN COMPANIES AND FOREING COMPANIES REGISTERED IN BRAZIL
Brazilian Federal Revenue (RFB) introduced the obligation of declaring beneficial owners for every company enrolled in CNPJ, including Brazilian companies with foreign shareholders and foreign companies enrolled in CNPJ, such as those who participate in Brazilian companies or simply own real state, bank accounts and other assets in Brazil. This obligation was introduced by IN 1634/2016 and the identification of beneficial owners is aimed at combating corruption and tax evasion.
The beneficial owner is identified by the RFB as the individual who ultimately, directly or indirectly, possesses, controls, or significantly influences the business or natural person on whose behalf a transaction is conducted. Significant influence is defined as holding, directly or indirectly, more than 25% of the capital of the entity or exercising preponderance in the social deliberations and power to elect the majority of the administrators of the company.
Some types of business structures do not fit these demands, such as public corporations, non-profit entities, central banks, investment funds, among others, provided they are not located in tax havens. The deadline for informing and presenting the documentation of final beneficiaries to the RFB is until December 31, 2018. Companies that do not comply with this requirement may have their registration with the CNPJ suspended and will be prevented from transacting with banking establishments.
WHAT SHOULD I DO?
- As a general rule, all CNPJs must declare their beneficial owners to the RFB by the end of 2018. To verify if any CNPJs under your responsibility may be exempt from the declaration, check IN 1634/2016;
- Identify all individuals who are the beneficial owners of each CNPJ under your responsibility. It is recommended to map the entire shareholding chain and design the shareholding structure indicating all holdings of 10% or more until reaching individuals;
- Gather the corroborating documents, make sure all documents coming from abroad have Apostille (as per Hague Apostillle Convention) and be aware that all documents in foreign language must be sworn translated in Brazil;
- Inform RFB who are the beneficial owners of each CNPJ by transmitting a DBE through the web (Coleta Web App). If no person qualifies as a beneficial owner in foreign companies, the declaration must be transmitted stating that there are no beneficial owners. If no person qualifies as a beneficial owner in Brazilian companies, it is not necessary to transmit the declaration.
- Deliver all corroborating documents to RFB through a digital folder;
- Whenever there is a change, inclusion or exclusion in the beneficial owners, update this information through a new DBE by the Coleta Web App and provide the supporting documentation to the RFB.
Dutra is able to assist in the accomplishment of all the steps. Check the conditions of these services.