Exactly five years ago, the first foreign asset voluntary disclosure program in our history began in Brazil. Called the Special Regime for Currency and Tax Regularization (RERCT), it became known as ‘amnesty.’
Despite the precarious drafting of the law and threats from the Federal Revenue Service, the program successfully allowed the collection of almost BRL 170 billion in taxes and fines. In 2017, the Government reopened the RERCT, but with more modest results.
Well, maybe soon we will have a new “RERCT round 3” that reopens the opportunity for taxpayers to regularize assets abroad that have not been properly declared to the Brazilian authorities.
Foreign capital entering Brazil requires registrations that varies depending on its purposes. The Central Bank of Brazil is the authority in charge of foreign capital registration through the Electronic Declaratory Registry (Registro Declaratório Eletrônico, or RDE).
As of today (March 1, 2021), Brazilian resident individuals have to report their taxes to the Federal Revenue Department by filing their annual tax returns. The deadline for the filing is April 30, 2021, and it applies to expatriates residing in Brazil in 2020.
Expatriates coming to work in Brazil must take some precautions when preparing their first Brazilian annual income tax return. Some mistakes and errors made in the first tax return may cause unnecessary and undesirable effects in the future.
Once the complaints have been received through the appropriate channel or even once the company becomes aware of potential violations by other means, it is time to conduct internal investigations to ascertain whether there are grounds for such complaints. If so, the organization has to take action according to the legislation and its internal rules.
Compliance activities are not limited to preventive measures. Responsive and investigative efforts are also part of the compliance framework. These activities aim to identify violations of the Law, internal rules, and ethical principles. After all, despite all the guidance and standardization of a compliance program, there are always those who insist on incurring violations. An organization must investigate these violations and apply disciplinary measures, as appropriate.
Today we deal with another essential element for a successful Compliance and Integrity Program: Communication. It is a concept that is of the utmost importance for the implementation, development, and maintenance of any compliance program in Brazil.
Communication is, of course, also critical for Risk Management and Corporate Governance.
The Code of Conduct is essential to any company’s Compliance and Integrity Program. After creating a “tone at the top” atmosphere – which requires full leadership commitment – and conducting all necessary risk assessments, it’s time to draft the Code of Conduct, considering the probability of the risks and their potential impact on the company.