The Brazilian Federal Revenue Service’s Normative Instruction (IN) No. 2119, published on 6 December 2022 (IN 2119), amended the provisions on the requirements to the General Taxpayer’s Registry (CNPJ) under the Brazilian Federal Revenue Service, as well as the provisions related to the Disclosure of Ultimate Beneficial Owner (UBO) with the Federal Revenue Service.
Among the changes established by the IN 2119, the following should be noted:
- The entities domiciled in Brazil and domiciled abroad shall now have 30 calendar days, as of 1 January 2023 or from the date of its enrollment with CNPJ (if this procedure occurs after 1 January) to disclose the Ultimate Beneficiary Owner. Regarding the entities domiciled abroad, the request for extension of this deadline is admitted for another 30 calendar days, provided it is formalized and justified by the legal responsible for the CNPJ of the foreign entity with the Brazilian Federal Revenue.
- In the process of disclosure the UBO of a foreign entity, the corporate instrument required by the Federal Revenue Service as proof of the entity’s existence must be an incorporation act or a full content certificate, issued by the competent Commercial Registry or equivalent in the origin country, demonstrating the composition of the share capital or voting rights of the entity.
- In the UBO disclosure process, the organization chart required by the Brazilian Federal Revenue to attest the corporate chain of the entity, foreign or Brazilian, must now contain at least the following information: full name of each shareholder part of the corporate chain; shareholding, tax identification number (or similar, in the country of origin, if it is a foreign entity) and country of origin, aside from attesting the natural person as ultimate beneficial owner or mentioning that there is no such natural person that may be considered an ultimate beneficial owner, pursuant to Article 53 of IN 2119. Also, for foreign entities, the organizational chart must be issued by competent Commercial Board or equivalent in the country of origin or equivalent, or signed in Brazil by its legal representative/attorney-in-fact;
- Still regarding the UBO disclosure process, entities domiciled in Brazil that have only natural person as shareholders are now required to disclosure the Ultimate Beneficiary Owner in case the non-existence of shareholders with more than a 25% equity interest;
- The DBEs (Brazilian Federal Revenue´s filling forms) issued and not presented to the competent authority for the UBO disclosure will have a limited 90-day validity period, counted from the issuance date of the DBE. The DBEs will be automatically canceled by the national REDESIM collector if not presented within such deadline
- As of the effectiveness of IN 2119 and with the update of the national REDESIM collector system, the issuance of the CNPJ of a corporation with a single officer can now be duly effected, as well as the registration of a corporation or limited liability company with an officer residing abroad, as long as the officer appoints and maintains an attorney-in-fact resident in Brazil.
The IN 2119 was published in the Official Federal Gazette (“Diário Oficial da União“) and came into force on 1 January 2023. As of this date, the provisions above must be observed for the purposes of the disclosure of Ultimate Beneficial Owners and of the enrollment of General Taxpayer’s Registry, in Brazil.
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