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On January 14, 2016, the official gazette published Law No. 13254/2016, which details the procedure to regularize undisclosed assets located abroad.

This law presents an opportunity for those who have undisclosed assets abroad to regularize their situation before the Brazilian Tax Authorities, and thus avoid criminal prosecution for crimes such as unlawful transference of currency and tax evasion.

The possibility of regularization is limited to assets acquired with proceeds of lawful activities before December 31, 2014 (even if they are no longer owned by the declarant).

Aside these requirements for enrolment in the regularization program, the declarant is subject to a 15% rate of Capital Gains over the assets declared and a fine of 100% over the tax levied. Payment of these amounts must be done at sight.

This law is already in force, although it still depends on additional regulation by the Brazilian Federal Revenue Bureau before taxpayers can start presenting their declarations.

The deadline for enrolment in the program will be determined by the act of the Federal Revenue Bureau regulating the program. Enrolment in the program must happen within 210 days of the day when the regulation issued by the Revenue Bureau comes to force.

This opportunity must not be wasted by taxpayers in irregular situation, because it is certain that once the tax information exchange programs start, the Federal Revenue Bureau wail spare no effort to repatriate irregular assets abroad, inclusive by means of criminal prosecution.

Should you require additional information on the subject above, do not hesitate contacting our Tax Department for further orientation.