A requirement for taxpayers to submit a declaration form by September 30th each year with details of any transactions that may result in tax savings is stated in a Provisional Measure 685/2015 published in Brazil’s Official Gazette last July.
The measure is in response to Action 12 of the OECD’s (Organisation for Economic Co-operation and Development) Base erosion and profit shifting initiative (BEPS) which would require taxpayers to disclose potentially aggressive or abusive tax planning arrangements. As the measure states, any operations that occurred in the previous calendar year and had as a result elimination, reduction or deferral of taxes, must be reported under consideration of the criteria given.
If the Brazilian Inland Revenue does not agree with the position that the taxpayer adopted, they would advise them to pay the entire amount of tax within 30 days. For further explanation, if a disclosure contains errors, omissions, false or fraudulent information, then it will be disregarded accordingly.