BRAZILIAN INTERNAL REVENUE SERVICE PUBLISHES NEW INSTRUCTION ON THE “CNPJ” AND EXTENSES DEADLINE FOR ENTITIES TO REPORT FINAL BENEFICIARY
On December 28th , 2018, the Brazilian Internal Revenue Service (Receita Federal do Brasil – “RFB”) published “RFB” Normative Instruction No. 1,863 / 2018 (“IN RFB No. 1,863”), which provides for the National Registry of Legal Entities (“Cadastro Nacional da Pessoa Jurídica – CNPJ”) and repeals RFB Normative Instruction No. 1,634 / 2016 .
The main changes introduced by “IN RFB 1,863” relate to adjustments in the obligation to inform the final beneficiary imposed to certain entities that have a registration with the “CNPJ”.
The deadline for certain entities enrolled in the “CNPJ” to inform their final beneficiary to the Internal Revenue Service would end on December 31st, 2018, With the publication of “IN RFB 1,863”, this period was extended by another 180 days.
The following entities are obliged to inform the entire shareholding participation including the final beneficiary reaches: (i) clubs and investment funds established in accordance with the rules of the Brazilian Securities and Exchange Commission; (ii) entities domiciled abroad that are registered with the “CNPJ”; (iii) banking institutions headquartered abroad that carry out foreign currency purchase and sale transactions with banks in Brazil; and (iv) holding companies.
In addition to the obligation to inform the final beneficiary, banking institutions with foreign headquarters and foreign legal entities holding equity interest outside the capital market or carrying out external leasing, chartering vessels, renting equipment or importation of assets without foreign exchange coverage, destined to the payment of capital of Brazilian legal entities, must, in the same period, present the following documents:
(i) the constitutive act of the entity (or certificate of full content); (ii) identification document or passport of the legal representative of the entity in the country of origin;
(iii) act demonstrating the “powers of administration” of the legal representative of the foreign entity in the country of origin, if such information does not appear in the act of constitution; (iv) certified copy of the power of attorney appointing its legal representative in Brazil;
(v) certified copy of the identification document of the representative of the foreign entity in the “CNPJ”; and (vi) Members and Board of Directors
Entities that do not comply with the provisions regarding the beneficiary’s report and the submission of documents within the timeframe signed in “IN RFB No. 1,863” will have their registration with the “CNPJ” suspended and will be prevented from transacting with banking establishments, including with regard to the movement of bank accounts, realization of financial investments and obtaining bank loans.