Ana Carolina Rovida de Oliveira
Lawyer at Marcos Martins Advogados
With the publication of RFB Normative Instruction 1,634/2016, Brazilian legal entities and legal entities domiciled abroad that own real estate, vehicles, current accounts, equity stakes or investments in the financial and capital markets, when submitting their registration information to the Brazilian Federal Revenue Service, must identify their chain of corporate participation, until reaching the final beneficiary.
The final beneficiary, as detailed in the Normative Instruction, is understood to be “the natural person on whose behalf a transaction is conducted” or “the natural person who ultimately, directly or indirectly, owns, controls or significantly influences the entity”. Such significant influence is presumed when the natural person “owns more than 25% (twenty-five percent) of the entity’s capital, directly or indirectly” or “directly or indirectly, holds or exercises the preponderance in corporate resolutions and the power to elect the majority of the entity’s administrators, even if without controlling it”.
The main objective of this rule was to inform the Federal Revenue Service of the entire corporate chain involved in a specific entity (which holds a CNPJ), mainly as a measure to prevent and combat tax evasion, corruption and money laundering.
Although the aforementioned Normative Instruction was published in 2016, it was only in October 2017 that the rules and information required to indicate the final beneficiary were defined by means of Executive Declaratory Act COCAD 9, and the ColetaWeb system was only updated to allow the inclusion of information on this subject after the publication of the aforementioned Act.
According to the above-mentioned rules, if the company registered with the CNPJ as of July 2017, it was already obliged to inform the final beneficiary to the Federal Revenue Service upon registration.
On the other hand, legal entities registered with the CNPJ before July 1, 2017, must inform their final beneficiaries at the same time as they make any other registration changes with the CNPJ or by December 31, 2018 at the latest.
Thus, as of January 1, 2019, Brazilian and foreign legal entities that have not provided information on their final beneficiaries will have their CNPJs suspended until they are regularized, which may prevent transactions with banking establishments, for example, including the movement of current accounts, making financial investments and obtaining loans.
The law firm Marcos Martins Advogados is able and willing to deal with questions regarding the indication of final beneficiaries of Brazilian and foreign companies, in order to review and update their registrations with the Federal Revenue Service, under the terms and within the maximum period indicated above.
