The Brazilian Tax Amnesty Program: The Regime Especial de Regularização Cambial e Tributária

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Jason B. Freeman

Jason B. Freeman

Managing Member

214.984.3410
jason@freemanlaw.com

Mr. Freeman is the founding member of Freeman Law, PLLC. He is a dual-credentialed attorney-CPA, author, law professor, and trial attorney.

Mr. Freeman has been named by Chambers & Partners as among the leading tax and litigation attorneys in the United States and to U.S. News and World Report’s Best Lawyers in America list. He is a former recipient of the American Bar Association’s “On the Rise – Top 40 Young Lawyers” in America award. Mr. Freeman was named the “Leading Tax Controversy Litigation Attorney of the Year” for the State of Texas for 2019 and 2020 by AI.

Mr. Freeman has been recognized multiple times by D Magazine , a D Magazine Partner service, as one of the Best Lawyers in Dallas, and as a Super Lawyer by Super Lawyers, a Thomson Reuters service. He has previously been recognized by Super Lawyers as a Top 100 Up-And-Coming Attorney in Texas.

Mr. Freeman currently serves as the chairman of the Texas Society of CPAs (TXCPA). He is a former chairman of the Dallas Society of CPAs (TXCPA-Dallas). Mr. Freeman also served multiple terms as the President of the North Texas chapter of the American Academy of Attorney-CPAs. He has been previously recognized as the Young CPA of the Year in the State of Texas (an award given to only one CPA in the state of Texas under 40).

Earlier this year, the Brazilian government put into place the Special Currency and Tax Regularization Regime (Regime Especial de Regularização Cambial e Tributária or “RERCT”), a fiscal amnesty program established by Law No. 13,254/2016 that allows holders of previously undeclared offshore assets to report those assets to Brazilian tax authorities.  The program is currently set to close on October 31, 2016.

The Brazilian government estimated that Brazilians may hold as much as $400 billion in undisclosed offshore accounts.  The program, which allows certain Brazilian residents or persons domiciled in Brazil to voluntarily declare unreported assets of lawful origin that were held abroad, is expected to raise nearly $11 billion reais (or $2.74 billion) in revenue.

Notably, the program offers criminal amnesty to Brazilians who come forward under the program and disclose unreported asset.  Taxpayers seeking amnesty under the program are required to take several steps, including filing a regularization declaration with the Brazilian revenue agency (the Receita Federal Brasileira), filing an amended tax return for the 2014 year, and paying a 15% tax and a fine equal to 100% of the income tax due.

Also notably, Brazil is a signatory to an IGA with the United States to implement the Foreign Account Tax Compliance Act (“FATCA”) (and the related exchange of information) and recently ratified the OECD’s Multilateral Convention on Mutual Administrative Assistance in Tax Matters.  It has, in other words, taken significant steps towards tax and financial transparency, upping the ante, so to speak, for those considering the RERCT.

International & Offshore Tax Compliance Attorneys

Need assistance in managing the Tax Compliance process? Freeman Law can help businesses and individuals manage critical tax risks and make sense of complex international tax compliance rules. We offer value-driven legal services and provide practical solutions to complex tax issues.  Schedule a consultation or call (214) 984-3410 to discuss your tax concerns.

 

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