Brazil Tax Alert - 9 July 2012
New reporting requirement for cross-border transactions involving services and intangibles
By Marcelo Natale, Mauricio Bianchi Ferreira and Cristina Arantes Berry
The Brazilian tax authorities published guidance on 28 June 2012 (Normative Ruling RFB No. 1277) that establishes an obligation for Brazilian residents to provide information on transactions with nonresidents that involve the provision of services, the transfer/acquisition of intangibles or that affect the capital of parties (whether individuals or legal entities) to the transaction. The ruling is effective as from 29 June 2012.
The reporting obligation is mandatory and the information will have to be provided by the Brazilian resident or its representative through a web-based portal to be made available by the Brazilian tax authorities. (For these purposes, a resident includes a Brazilian subsidiary or a foreign subsidiary or branch of a Brazilian company.) Transactions carried out before 31 December 2013 must be reported within 90 days; thereafter, transactions must be reported within 30 days.
An appendix to the Normative Ruling sets out the categories of services and intangibles that must be reported.
The following transactions and/or taxpayers are exempt from the reporting obligation:
- The import and export of goods and any intangibles related to such goods, even though such transactions still must be reported under the General Agreement on Trade in Services.
- Entities that fall within the scope of the simplified taxation scheme; and
- Individuals who do not carry out professional business activities that exceed USD 20,000 (per transaction).
A fine of BRL 5,000 per month or fraction thereof will be imposed for late filing and if incomplete or inaccurate information is submitted, a fine equal to 5% of the value of transactions in the relevant period also will be imposed.
The new reporting obligation is similar to information reporting requirement under the Integrated System of Foreign Trade for Services, Intangibles and other transactions (SISCOSERV) that must be submitted to the Ministry of Development, Industry and Foreign Trade with respect to transactions between residents and nonresidents. The two returns are submitted to different authorities, even if they contain the same information.