RERCT-General: 5 Questions and Answers About the Assets and Real Estate Regularization Program

Individuals and legal entities have until 12/15 to adhere, including declaration, tax payment, and fine.

The Federal Revenue Service, through Regulatory Instruction No. 2,221/2024, recently regulated the General Special Regime for Foreign Exchange and Tax Regularization of Assets – RERCT-General.

The program allows individuals and legal entities to voluntarily regularize legally-held assets in Brazil or abroad. For taxpayers, this can represent an opportunity to ensure tax compliance and avoid future complications, including criminal ones.

Here are some questions and answers about the regularization process:

1. What is the RERCT, and who can declare it?

The RERCT was established by Law No. 14,973/2024 to facilitate the declaration and regularization of undeclared or incorrectly declared assets. It is aimed at residents or those domiciled in Brazil who held assets in the country or abroad by December 31, 2023.

Read more: Individual taxpayers: Law provides for foreign currency regularization of assets and property value adjustments

2. What can be declared?

Among the assets and rights that can be declared are:

• Bank deposits, certificates of deposit, investment fund shares, financial instruments, insurance policies, investment certificates or capitalization operations, credit card deposits, retirement or pension funds;
• Loan transactions with individuals or legal entities.
• Resources, assets, or rights of any nature resulting from illegitimate or unauthorized foreign exchange transactions;
• Resources, assets, or rights of any nature invested in foreign companies in the form of shares, payment of capital, capital contributions, or any other type of corporate participation or equity interest in entities with or without legal personality.
• Intangible assets available abroad of any nature, such as trademarks, copyrights, software, know-how, patents, and any and all rights subject to the royalty regime;
• Real estate in general or assets representing rights over real estate;
• Vehicles, aircraft, vessels, and other movable property subject to registration in general, even if under statutory lien.

3. What is the deadline for joining the RERCT – General?

The deadline for joining the program is December 15, 2024.

4. What are the conditions for regularization?

Adherence to the RERCT depends on meeting three requirements:

1. Submission of a single specific regularization declaration with details on the declared resources, assets, and rights.
2. Payment of income tax, in Brazilian reais, at a rate of 15% on the total amount of resources to be regularized.
3. Payment of a regularization fine, also in Brazilian reais, amounting to 100% of the income tax.

5. What are the benefits of joining the RERCT - General?

Among the advantages, as long as all the requirements of the program are met, are:

• the possibility of tax regularization with the federal agency;
• the payment of 30% of the asset value as tax and penalty;
• the waiver of late payment penalties;
• the exclusion of tax liability due to the voluntary disclosure of the infraction, provided it is accompanied by the payment of due taxes and arrears interest, or the required deposit;

In any case, it is essential for the interested taxpayer to assess opportunities and potential risks based on the specifics of their situation, and it is advisable to seek specialized guidance in this process.

Support for Tax Compliance

Domingues e Pinho Contadores has specialized teams to assist individuals and companies in maintaining tax compliance. Count on this support: dpc@dpc.com.br