Brazil’s special regime for tax and exchange legislation (RERCT) was reopened on 30 March 2017 and will run until 31 July.
First launches in January 2016, RERCT offered Brazilian taxpayers the opportunity to regularise their tax affairs without facing criminal prosecution. Instead they would pay a one-off tax charge of 15%, plus a 15% penalty.
When RERCT closed on 30 October 2016, more than 25,000 individuals and 103 companies took advantage of the amnesty and declared offshore assets worth more than BRL169.9bn (£44bn, $54bn, €51bn), netting the taxman BRL50.9bn in taxes and penalties.
The extended offer, however, comes with a slight sting in the tail.
In addition to paying 15% income tax on the value of the offshore assets, those taking advantage of the amnesty will have to pay a “regularisation penalty”, which equates to 135% of the income tax due.
Alessandro Amadeu da Fonseca, partner at Brazilian law firm Mattos Filho, told the Society of Trust and Estate Practitioners (Step): “For clients, RERCT is a new opportunity – maybe the last – to avoid criminal liability for holding undisclosed assets abroad, in the context of a [Common Reporting Standard] world.
“Practitioners need to draw on their expertise in criminal law, tax and accountancy both to advise their clients on the RERCT procedures and assist them in the organisation of the now-disclosed assets.”
