Brazil Extends Deadline For Tax Amnesty

Brazil’s tax amnesty (Special Regime for Tax and Exchange Legalisation or RERCT) has been reopened. The Brazilian government has extended, by 120 days, the opportunity for Brazilian taxpayers to declare assets previously held abroad and avoid criminal liability to September 29, 2017.

Under the scheme, individuals agreeing to pay tax debts within the terms of the scheme benefit from reduced penalties and interest charges. The first two installments of tax (for August 2017 and September 2017) must be paid by September 29, under the revised schedule. The amnesty – Special Tax Regularization Program (Pert) – covers tax due up to April 30, 2017.

Under the initiative, late-payment interest charges will be reduced by between 50% and 90% and fines will be cut by between 25% and 50%, depending on how quickly taxpayers intend to settle the outstanding tax debt. The declaration of previously undisclosed assets must be done within 120 days starting on March 30, 2017, according to Law No. 13,254/17 (implemented by Regulatory Instruction (RI) No. 1,704), which establishes the new tax amnesty.

In order to take advantage of the tax and criminal liability exemptions provided by the new amnesty, eligible taxpayers must, by July 31, 2017 do the following:


  1. Submit the amnesty return (“DERCAT”);
  2. Pay, in full, a 15 percent income tax assessment on the total value of the previously undisclosed assets held abroad, in Brazilian reais; and
  3. Pay, in full, the regularization penalty, which corresponds to 135 percent of the assessed income tax – a higher amount than that under the 2016 amnesty.


Who can take part in the amnesty?

  • The RERCT applies to all individuals or legal entities resident, or domiciled, in Brazil on June 30, 2016, with assets that were either not declared or incorrectly declared to the Brazilian tax authorities.
  • Persons and legal entities not resident in Brazil on January 13, 2016, the date of publication of the first RERCT (Law No. 13,254/16), can also apply, provided that the individual became resident, or domiciled, in Brazil by June 30, 2016.
  • RI No. 1,704/17 also provides that a deceased’s estate with undeclared assets held abroad can take part in the amnesty, provided that the succession is open until July 31, 2017.
  • Those in public office, and their spouses and relatives (up to second-degree relatives), including relatives through adoption, are not entitled to join the RERCT, as was the case with the 2016 tax amnesty.

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