Originally published in the May 13 edition of World Tax Daily (Copyrights Tax Analysts – www.taxanalysts.com)
Brazil’s Central Bank has established a filing period of June 9 through July 31 for the mandatory reporting of foreign assets for those with foreign assets worth at least $100,000 (approximately BRL 169,000), or the equivalent amount in other currencies, as of December 31, 2007.
The deadline was announced in Circular 3,384/2008, published in the official gazette on May 8.
In addition to the legal obligation to file annual income tax returns, Brazilian individuals and companies with substantial foreign assets must file an annual return (Declaração Eletrônicados Capitais Brasileirosno Exterior, or CBE) with Brazil’s Central Bank, declaring all foreign assets held during the preceding year.
The information reported in the CBE must be divided into the following categories: deposits abroad; cash loans; financing; operational and financial leasing; direct investments; portfolio investments; investments in derivatives; and other investments, including real estate and other assets.
Investment funds, through their fund managers, must also file a CBE outlining their investments by type and other details.
Those responsible for filing CBEs are required to keep supporting documentation for a period of five years. Failing to file CBEs, or providing false, incomplete, or misinformation, may result in penalties of up to BRL 250,000 (approximately $148,000).
David Roberto R. Soares da Silva