Brazil

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Overall Phase 2 Rating is Largely Compliant

Table of Determinations and Ratings of the Phase 2 Review

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is in place.   There are some uncertainties as to whether the attorney-client privilege may unduly limit access to information acquired by attorneys.  Brazil should clarify the scope of the attorney-client privilege provision to ensure consistency with the standard. 
Phase 2 Rating Factors Recommendations
Compliant.     
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   There are no explicit exceptions to the prior summoning procedure for accessing detailed bank account information. To require in all cases that the taxpayer be first approached, and thus notified, may unduly prevent or delay the effective exchange of information in urgent cases.  It is recommended that certain exceptions from prior summoning procedure for accessing detailed bank information be permitted (e.g. in cases in which the information requested is of a very urgent nature or the notification is likely to undermine the chance of the success of the investigation conducted by the requesting jurisdiction). 
Phase 2 Rating Factors Recommendations
Partially Compliant.     
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Of the 40 EOI agreements signed by Brazil, 28 provide for exchange of information to the standard. Of these 28 EOI agreements, 19 are in force. Brazil has taken necessary steps to renegotiate the 12 EOI agreements which do not meet the standard.  Brazil should ensure that all its agreements provide for exchange of information to the standard. 
Of the 40 EOI agreements signed by Brazil, 31 are in force. The ratification of EOI arrangements is delayed on some occasions and can take several years.  Brazil should ensure the ratification of all EOI arrangements signed with counterparts expeditiously. 
Phase 2 Rating Factors Recommendations
Largely Compliant.     
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place.     Brazil should continue to develop its EOI network with all relevant partners. 
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.   There are some uncertainties as to whether the attorney-client privilege may unduly limit access to information acquired by attorneys.  Brazil should clarify the scope of the attorney-client privilege provision to ensure consistency with the standard. 
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.      
Phase 2 Rating Factors Recommendations
Partially Compliant.  Although Brazil has made significant progress in response times over the three-year period, in many instances the competent authority has been unable to answer incoming requests in a timely manner. The current EOI structure and processes for handling EOI requests, in particular the lack of an appropriate level of resources and the lack of clear monitoring of timeframes for obtaining and providing information, has inhibited expedient responses to EOI requests.  Brazil should endeavour to improve its resources and streamline its processes for handling EOI requests and ensure that the EOI Unit is clearly monitoring the timelines of all EOI requests as they are being processed to ensure that all EOI requests are responded to in a timely manner. 
Brazil does not always provide an update or status report to its EOI partners within 90 days in the event that it was unable to provide a substantive response within that time.  Brazil should ensure that a new internal procedure is put in place to provide status updates to EOI partners within 90 days in those cases where it is not possible to provide a complete response within that timeframe. 

Earlier self-assessment based annual reports entitled Tax Co-operation 2010: Towards a Level Playing Field are also available.