Jayme Petra de Mello Neto
Advogado do Escritório Marcos Martins Advogados
By means of the Normative Instruction RFB No. 1.634/2016, all Brazilian legal entities and all foreign legal entities, that are owners of properties, vehicles, current accounts, corporate interests or investments in the Brazilian financial and capital markets, when submitting their registration information to the Brazilian Federal Revenue, must provide information about their chain of corporate interests, including up to the final eneficiary.
According to the Normative Instruction, the final beneficiary (UBO – Ultimate Beneficial Owner) is understood as the “natural person on whose behalf a transaction is conducted” or “the natural person who, in the last instance, directly or indirectly, possesses, controls or significantly influences the actions of the entity. This significant influence is presumed when the natural person “holds, directly or indirectly, more than 25% (twenty five percent) of the entity’s capital” or “holds or exercises, directly or indirectly, preponderance in the corporate resolutions and the power to elect most of the administrators of the entity, even if it does not control it”.
The main purpose of the introduction of this regulation was to give knowledge to the Federal Revenue regarding the entire chain of ownership involved in a specific entity (holder of a specific CNPJ); mainly as a measure to prevent and combat tax evasion, corruption and money laundering.
Although the referred Normative Instruction was published in 2016, it was only in October 2017 that the rules and information required to include the final beneficiary were defined by means of the COCAD Executive Declaratory Act No. 9, and the filling of the “ColetaWeb” system was updated to allow inclusion of information on such subject after the publication of the above referred Act.
According to the abovementioned rules, the legal entities enrolled before the CNPJ from July 1st, 2017 onwards, were already obliged to inform the final beneficiary (UBO) to the Federal Revenue, at the time of first registration.
And the entities already enrolled before the CNPJ before July 1st, 2017, must adapt their enrollments to the new rules and inform their final beneficiaries (UBOs), at the same time that they proceed with any updating, or until the deadline of June 28th, 2019.
Therefore, on June 29th, 2019, Brazilian and foreign legal entities that have not provided information regarding their final beneficiaries (UBOs) will have their enrollments with the CNPJ suspended, until regularization, which may prevent, for example, transactions with banking establishments, including bank accounts operations, financial investments and obtaining loans.
Marcos Martins Advogados is capable and at your disposal to discuss issues regarding the inclusion of final beneficiaries (UBOs) of Brazilian and foreign companies, in order to review and update their registration before the Brazilian Federal Revenue, under the above terms and deadline.