Law No. 14,973/2024 sets forth the Special Regime for the General Regularization of Foreign Exchange and Tax Assets (RERCT-General), allowing voluntary disclosure of resources, assets, or rights that were not properly declared, whether held in Brazil, abroad or repatriated by Brazilian residents.
EXTINCTION OF CRIMINAL LIABILITY: The Regime extinguishes criminal liability for not declaring assets, since these assets have a lawful origin.
Who is eligible to join the regime?
Any individual resident or domiciled in Brazil who holds assets or resources that were not properly declared by December 31, 2023. This includes:
• Bank deposits;
• Certificates of deposit and investment funds;
• Insurance policies;
• Real estate;
• Vehicles, boats, aircraft;
• Shareholdings in companies (in Brazil or abroad);
• Intangible rights, such as trademarks, patents, and copyright.
Taxpayers who adhered to the RERCT under Law No. 13,254/2016 may complete the DERCAT. In such case, they must pay the additional tax and fine, as well as comply with the new date set for converting the amounts expressed in foreign currency (12/31/2023).
What is the deadline for joining?
Within 90 days of the Law’s official publication (expected on 12/15/2024).
How is the regularization process?
(1) Submitting a single statement to the Federal Revenue Service detailing assets or resources of lawful origin held as of December 31, 2023. The declared amounts must reflect the market value of the assets.
(2) Payment of capital gain tax of 15% on the total amount of the repatriated assets, plus a 100% fine on the tax due, resulting in a total charge of 30%.
(3) For individuals, submitting an amended income tax return for the 2024 calendar year and subsequent years.
(4) For legal entity, maintain corporate bookkeeping for the calendar year of joining and subsequent years.
(5) For individual or legal entity, submitting an amended Declaration of Foreign Assets and Capital Abroad for the calendar year 2024 and subsequent years, if obliged to do so.
(6) Providing a statement declaring that repatriated assets originate from lawful economic activities. No proof is required unless the tax authority demonstrates that the taxpayer’s statement
What are the future tax effects?
Taxpayers must include repatriated assets and resources in the following statements:
• Future income tax returns.
• the Declaration of Foreign Assets and Capital Abroad, if applicable; and
• Corporate bookkeeping (for legal entities).