In line with BEPS Action 12, the Brazilian President enacted, on
July 21, 2015, the Provisional Measure (“MP”) no. 685,
creating the obligation for taxpayers to disclose aggressive tax
plannings. Even though this MP is enforceable immediately, the
actual disclosure still depends on regulations to be issued in the
near future. In addition, a MP is a temporary law that is submitted
to the Brazilian Congress, who can, within 120 days, either (a)
approve; (b) reject; (c) approve with changes; or (d) do nothing.
If the Congress does not approve within 120 days, the MP expires
and ceases its effects.
MP 685/2015 establishes that taxpayers are obliged to declare to
Brazilian tax authorities, until the end of September of each year,
the transactions performed in the previous calendar year that
involve elimination, reduction or deferral of tax.
