Brazil: Congress Approves Agreement Between Brazil And The United States For The Automatic Exchange Of Financial Information
Congress just approved the intergovernmental agreement between Brazil and the United States for the automatic exchange of financial account information (Legislative Decree 146/2015, published on June 26). According to the terms of the agreement, Brazilian financial institutions (or Brazilian branches of foreign financial institutions) must identify financial accounts of United States individuals or legal entities (a definition that includes legal entities not organized in the United States, but controlled by a United States individual or legal entity) and report annually to Brazilian tax authorities with specific information related to these accounts.
The entry into force of this agreement in Brazil allows Brazilian financial institutions to comply with the terms of the United States Foreign Account Tax Compliance Act (“FATCA”), which is aimed at obtaining financial information of individuals and legal entities recorded by foreign financial institutions. The agreement is based on Decree 8,003/2013, which approved the terms of the Tax Information Exchange Agreement between the two countries.
In September 2015, tax authorities will carry out the first effective exchange of information, but before that happens, the President of Brazil must ratify and promulgate the agreement.
