Brazilian and foreign companies established in the country must declare their overseas assets to the Central Bank of Brazil, for amounts equal to or greater than US$100k, as at 31 December 2015. This year, the deadline to submit the declaration is 6pm on 5 April. The same rule applies to individuals, both Brazilians and foreigners living in the country.
Local and foreign companies operating in Brazil, as well as Brazilian individuals and foreigners domiciled in the country; with overseas assets exceeding US$100,000 on the last day of 2015, have until 6pm on 5 April 2016, to submit their Annual Declaration of Brazilian Capital Abroad (CBE).
In cases where this value is equal, or greater than US$100 million, the declaration must be done quarterly and submitted on the last day of each quarter.
What is the Annual Declaration of Brazilian Capital Abroad?
The CBE identifies the total amount of Brazilian assets abroad, together with foreign liabilities. This International Investment Position (IIP), along with the payment balance analyzes the Brazilian economy's foreign sector.
This is required data for countries participating in the Special Data Dissemination Standard (SDDS); an International Monetary Fund (IMF) initiative to expand disclosure, transparency and international comparability of economic statistics. Data obtained through the CBE also goes toward the IMF's calculation of the Coordinated Portfolio Investment Survey (CPIS) and the Coordinated Direct Investment Survey (CDIS), which measures portfolio investment securities and inward and outward direct investment positions.
Fines and Penalties
An overdue declaration, as well as providing false, incomplete or incorrect information, is subject to a fine of up to R$250,000.
Since the Central Bank of Brazil and Individual Income Tax Declaration (IR) systems are integrated, it is important that the balances mentioned in the declaration, except for a few specific rules, also be reported in the IR, so that inconsistencies in both declarations do not raise suspicion, lead to audits or penalties.
Choosing the best option
Companies usually draft the CBE internally. However, time spent filling out the form could be used on more strategic activities; and if engaging an external services provider it important to find one that understands the local market.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
