RFB establishes special rules to file Country by Country Statement

Federal Revenue of Brazil brought special rules for drawing up the company’s Country by Country Statement other than ultimate parent multinational company group, through Normative Instruction No. 1722/2017, published in the Official Gazette of 27.07.2017.

There was an amendment in Article 3, from the RFB Normative Instruction No. 1681/166, indicating that, for the 2016 statement, even if the resident company in Brazil for tax purposes is not the final parent company of a multinational group, but is required to file DPP on the grounds that its tax jurisdiction has signed an international agreement with Brazil, but has no agreement from competent authorities with Brazil until the deadline to file the statement, and there is no indication of substitute entity, RFB will accept to be designated as the reporting company, in a transitional mechanism, the ultimate resident multinational group controller for tax purposes in jurisdiction who:

1) does not have competent authorities agreement in force with Brazil for automatic sharing of PPD. In such a case, if an agreement of competent authorities is not concluded until 12/31/2017, the entity that is resident for tax purposes in Brazil must, within a period of up to 60 days, rectify the ECF upon presentation of the DPP or indicate substitute entity for presentation Of that declaration for the 2016 fiscal year on behalf of the group;

2) has according to competent authorities in force with Brazil for automatic DPP share to declaration of fiscal years beginning from 01.01.2017. In this case, the member entity resident in Brazil may be summoned to present the DPP by rectifying the ECF, within 60 days, if:

2.1) until 12/31/2017, the retroactivity of the agreement of the competent authorities enabling the sharing of the DPP for the fiscal year 2016 statement has not been implemented; and

2.2) to another jurisdiction require one or more entities within a multinational group whose ultimate controlling shareholder is resident for tax purposes in Brazil delivery of the statement for the fiscal year 2016 statement.