Thursday, 29 January 2015

Brazil's guidance issued on transparency standards and black/grey list status

The Brazilian authorities published a Normative Ruling (NR 1,530/2014) on 22 December 2014 that defines “international fiscal transparency standards” and sets out the procedures for jurisdictions included on Brazil’s “black list” or “grey list” as a low-tax or privileged tax regime jurisdiction, respectively, to request the Brazilian tax authorities to reevaluate their status. The new ruling follows the issuance of an ordinance (Ordinance 488/2014) that reduced the income tax rate threshold for the application of the low-tax jurisdiction and privileged tax regime rules from 20% to 17% for countries that follow the OECD international fiscal transparency standards.
Under the ruling, jurisdictions are considered aligned with international fiscal transparency standards if they have signed or negotiated a treaty or agreement with Brazil relating to the exchange of information for tax purposes and are committed to following the standards established at international forums on fiscal evasion, such as the Global Forum on Transparency and Exchange of Information for Tax Purposes (which currently has 124 members, including Brazil).
The ruling also describes the procedures a jurisdiction should follow, and the information it should gather and present to Brazilian tax authorities, to request a review of its status as a low tax jurisdiction or privileged tax regime jurisdiction. The jurisdiction may request application of the reduced income tax rate threshold set by Ordinance 488/2014, as long as the jurisdiction is considered aligned with international fiscal transparency standards. The Brazilian tax authorities’ decision on the jurisdiction’s status will not apply retroactively.
Source: Deloitte