As previously reported, the Federal Revenue has postponed the deadline for companies to inform the final beneficiary in their National Registry of Legal Entities (CNPJ).
It is worth mentioning that, since July 2017, in addition to entities domiciled abroad, domestic entities are also required to provide information on their final beneficiaries, through the National Collector at registration with the CNPJ. The Normative Instruction 1634/2017, revoked on Dec-28-2018, established the deadline to Dec-31-2018 to update the registrations with the final beneficiary information by the entities enrolled in the CNPJ before Jul-1-2017.
The deadline for those who did not provide the information by December 2018, after the publication of the RFB Normative Instruction 1863/2018, which occurred on Dec-28-2018, is Jun-26-2019 (180 days from the publication of the current standard).
Although the deadline seems far in the future, companies should pay attention to this obligation, since companies, mainly multinationals, find it difficult to present their entire ownership chain until they reach the individuals who are the final beneficiaries.
It is noteworthy that the failure to complete the final beneficiary information within the deadline or failure to file the documents required will lead to suspension of the CNPJ registration, also preventing from bank transactions, including the checking accounts turnover, investments, and obtaining loans.
According to the legislation, the final beneficiary is the natural person who, ultimately, directly or indirectly, possesses, controls or significantly influences the entity; or on behalf of which a transaction is conducted.
The natural person having significant influence means to:
- directly or indirectly, hold over than twenty-five percent (25%) of the entity's capital;
- or, directly or indirectly, hold or prevail in the social resolutions and the power to elect the majority of the entity’s management, although not controlling it.
It is important to emphasize that this analysis is not restricted to the entity's corporate structure, but also one should observe the entire economic group to which it belongs to, since the final beneficiary might have indirect influence.
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