RERCT: New Instructions

The Internal Revenue Service of Brazil has new instructions about the Voluntary Disclosure and Amnesty Program.

In September, the Internal Revenue Service of Brazil (RFB) issued new instructions about the Voluntary Disclosure and Amnesty Program ("RERCT"), by publishing RFB Instruction ("IN/RFB") 1,832/20181.

In this article, we will address the novelties brought about by RFB IN 1,832/2017:

Causes of exclusion from RERCT Consequences to providing false statements Annulment of RERCT Membership Review procedure of reported amounts 1. The Internal Revenue Service of Brazil has established the understanding that if the following declarations by taxpayers are proved false2, it will cause exclusion from RERCT:

that the taxpayer has not been convicted in a criminal action, even if the judgment has not become final, whose object is one of the crimes in paragraph 1 of art. 5 of Law 13,254/2016; that the taxpayer was resident or domiciled in Brazil on December 31, 2014, according to the tax legislation; and that on January 14, 2016, the taxpayer did not have a position, job or public management or elective function and that he or she did not have a spouse or blood relative similar, to the second degree, or by adoption, under those conditions. 2. Before, submission of false information on the issues above, made joining the amnesty program null and void, i.e., adhesion was deemed as if it had not taken place. Consequently, the provisions of "RERCT Law" (Law 13,254 / 2016) should not apply.

Now, if those false statements are deemed to have been made:

the amounts of taxes, fines and interest will be collected, deducting the amount previously paid, without prejudice to the applicable civil, criminal and administrative penalties; and the initiation or continuation of investigative procedures regarding the origin of the assets may only happen as to the origin of the assets in the scheme if there is documentary evidence not related to that taxpayer's...