Brazil Releases Rules of Amnesty Program
Starting April 4, individuals and companies will be allowed to register in a Brazilian program to repatriate undeclared foreign funds and assets. Brazil’s official newspaper announced yesterday a sign-up period from April 4 to October 31, 2016. Requirements include a 15 percent income tax and a 15 percent fine on any hidden funds returned to Brazil calculated upon the position of December 31, 2014 and converted to the FX rate of BRL 2.65.
The following assets are included in the program:
- Bank deposits
- Investments
- Pension funds
- Loans
- Real estate
- Other undeclared assets that can be converted into funds for repatriation
The repatriation law signed in January allows taxpayers to declare hidden funds provided the origin of the funds was legal. . Individuals and companies accepted for the program will not face criminal and tax charges.
The program, approved by Congress last year, is part of President Dilma Rousseff’s efforts to reduce an increasing budget gap and revive investment in the recession-hit economy. Tax officials said the repatriation program could produce $5.7 billion in additional income tax collections this year and aims to further deter tax evaders.
In order to sign up for the program, taxpayers must fill out forms that will be made available on the tax department’s website starting April 4. Officials declared if incorrect information on the forms is discovered, the party involved will be expelled from the program but shall not be subject to prosecution for tax evasion solely based on the facts or evidence disclosed to the authorities under the program. Still according to the program regulations, such information will be subject to tax secrecy protection.