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The Exchange of Tax Information Portal is an initiative of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The Global Forum conducts peer reviews of its member jurisdictions' ability to co-operate with other tax administrations in accordance with the internationally agreed standard. The standard provides for exchange of information on request where it is foreseeably relevant to the administration and enforcement of the domestic tax laws of the requesting jurisdiction. Effective exchange of information requires that jurisdictions ensure information is available, that it can be obtained by the tax authorities and that there are mechanisms in place allowing for the exchange of that information. The Global Forum's peer review process examines both the legal and regulatory aspects of exchange (Phase 1 reviews) and the exchange of information in practice (Phase 2). The EOI Portal will track the development of these peer reviews, including changes that jurisdictions make in response to the Global Forum's recommendations.

Peer Review: Brazil Second Round Review (2018)

This report for Brazil has been published on 15 Oct 2018. You can browse it online below.

Skip directly to the Executive Summary. You may also want to view the tables of determinations and ratings.


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Determinations and Recommendations

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, but certain aspects of the legal implementation of the element need improvement.   There is no clearly applicable sanction for domestic entities that do not comply with their obligations to provide beneficial ownership information to the CNPJ register.  Brazil should ensure there are clearly applicable and appropriate penalties or sanctions for domestic entities that fail to provide beneficial ownership information to the register. 
Phase 2 Rating Factors Recommendations
Largely Compliant.  Legal entities and arrangements that have their CNPJ tax registration suspended or cancelled by the RFB do not automatically lose their trade or civil registration and legal personality. There could be circumstances in which certain entities remain in existence and their obligations to maintain or file up to date legal and beneficial ownership information remain unsupervised.  Brazil should ensure that legal and beneficial ownership is available in respect of all legal entities and arrangements, and monitor the situation of entities with a suspended or cancelled tax registration to ensure that they comply with all relevant obligations to maintain and file up to date ownership information. 
Brazil is in the initial stages of developing a supervision and enforcement programme in relation to its beneficial ownership register.  Brazil should fully develop a supervision and enforcement programme in relation to its beneficial ownership register as soon as possible, and monitor its effectiveness in practice to ensure the availability of beneficial ownership information in all cases. 
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, but certain aspects of the legal implementation of the element need improvement.   The AML/CFT legal framework does not explicitly provide for a beneficial owner identification method in respect of legal persons and arrangements fully in line with the standard. This may have led to beneficial ownership information in respect of bank accounts not being available in line with the standard in all cases, although this remained untested in the review period.  Brazil should take appropriate measures to ensure that beneficial ownership information is available in line with the standard for all account holders. 
Phase 2 Rating Factors Recommendations
Largely 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 continue to monitor the application of the scope of the attorney client privilege in practice to ensure consistency with the standard and that it does not unduly limit EOI. 
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.   Although Brazil provides assurances that it may obtain judicial waiver of the prior notification procedure in respect of accessing information held by financial institutions in very urgent or sensitive cases, there is no explicit exception to such procedure and the obtainment of such waiver for EOI purposes has not been tested in practice.  Brazil should either explicitly clarify the possibility of judicial waiver of the prior notification procedure, or introduce explicit exceptions in its legal framework. Brazil should also closely monitor that the procedure does not frustrate the provision of information held by financial institutions without prior notification of the taxpayer under investigation, where justified. 
Phase 2 Rating Factors Recommendations
Largely Compliant.     
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place.      
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 continue to monitor the application of the scope of the attorney client privilege in practice to ensure consistency with the standard and that it does not unduly limit EOI. 
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.   This element involves issues of practice. Accordingly no determination on the legal and regulatory framework has been made.   
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 due to delays at the level of the RFB’s compliance areas caused by workplace relations and staffing issues. Many requests were responded to or remain outstanding after more than one year.  Brazil should ensure that it can respond to all types of information requests in a timely manner, with due priority given to EOI requests by all areas of the RFB responsible for obtaining and providing the information. 
Brazil did 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 monitor the effectiveness of its new internal procedure and ensure it provides status updates to EOI partners within 90 days in those cases where it is not possible to provide a complete response within that timeframe.