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Federal Revenue Service requests identification of final beneficiary: filling term ends on 12.31.2018

22/11/2018

Another step of identification of final beneficiary ends on December 31st, deadline for foreign entities enrolled in the National Registry of legal Entities (“CNPJ”) inform their final beneficiary.

The procedure aims to deliver more transparence to the entire corporate chain lining up with transparence rules executed worldwide.

According to the Normative Ruling No. 1,634/2016, “final beneficiary” was defined as (i) a natural person who, ultimately, directly or indirectly, possesses, controls, or significantly influences the entity, or (ii) the natural person on whose behalf a transaction is conducted.

The Normative Ruling also provides that “significant influence” is presumed when the natural person, directly or indirectly, (i) owns more than 25% of the entity’s capital, or (ii) holds or exercises the preponderance in power to elect the majority of the entity’s administrators, even without controlling it.

If there is no a natural person in the shareholding chain that can be considered as beneficial owner, this information should also be provided to the Revenue Service.

The information provided must be supported by documents. The documents in foreign language must be translated into Portuguese by a sworn translator and authenticated by a Brazilian consular office.

Entities that do not provide the information regarding the beneficial owner or fill in disagreement with the rule will have their enrollment before CNPJ suspended and will be prevented from transacting with banking establishments, moving current accounts, making financial investments and obtaining loans.

Local entities are dismissed to provide information about the beneficial owner until complementary rule is published.

Candido Martins is at your disposition to provide further clarification on the identification of the beneficial owner regarding structures abroad.