RSM Brasil



Brazil has introduced Country-by-Country Reporting (CbCR) rules on December 28th 2016.

In general lines, CbC reporting must be presented annually in Brazil with information about companies overseas that are members of multinational groups (MNC) whose ultimate controller is resident in Brazil. The first CbCR must be filled until July 31st 2017, in relation to calendar year 2016 (January 1st to December 31st 2016), as part of the CIT return (know locally as “ECF”). No prior or separate notification to the Brazilian IRS is required.

It must submit CbCR every entity tax resident in Brazil that is the final controller of a multinational group whose total consolidated revenue in the fiscal year prior to the fiscal year return is equal to or greater than: (i) R$ 2,260,000,000; or € 750,000,000 (or other equivalent currency).

An entity that is tax resident in Brazil but not the final ultimate controller of a multinational group will be required to file the CbCR with information of the entire multinational group, if verified at least one of the following situations:

  • the final controller of the multinational group of which he is a member is not required to deliver the Country-to-Country report in his jurisdiction of residence for tax purposes;
  • the jurisdiction of residence for tax purposes of the parent company has signed an international agreement with Brazil, but does not have an agreement of competent authorities with the Country until the deadline for file the CIT return (July 31st); or
  • there has been a “systemic failure” of the jurisdiction of residence for tax purposes of the ultimate controller that has been notified by the Brazilian IRS (failure to exchange information).

As previously mentioned, CbCR will be filed annually in relation to the immediately preceding fiscal year ended, upon completion of Block W of the corporate income tax return (ECF) and submitted through the Public Digital Bookkeeping System (Sped).

There will be required several information and indicators related to the location of MNC activities, the global allocation of income and taxes paid and due.  Should be also identified all jurisdictions in which multinational groups operate, as well as all entities within the group (including permanent establishments) located in those jurisdictions and the economic activities they perform. CbCR should contain the following information:

a)    The identification of each entity that is part of the multinational group, by means of the:

  • jurisdiction of residence for tax purposes and, when different of this, the jurisdiction under whose laws the entity is established; and
  • the nature and detailed descriptions of its main economic activities.

b)    Aggregated information by jurisdiction in which the multinational group operates related to:

  • total revenues, indicating those obtained on related parties transactions;
  • losses or the income before tax;
  • income tax due and income tax paid;
  • the company’s capital and its retained earnings;
  • the number of employees (direct and indirect); and
  • tangible assets other than cash and cash equivalents;

c)   Provide additional relevant information, which, at the discretion of the multinational group, can be provided in a single language, to be chosen by the reporting entity from Portuguese, English or Spanish.

In case the company decides to file CbCR through a surrogate entity, it is mandatory to observe one of the following conditions:

I - the jurisdiction of residence for tax purposes of the substitute entity requires the delivery of the CbCR;

II - the surrogate entity filed the CbCR within 12 months from the last day of the fiscal year of the multinational group;

III - the jurisdiction of residence of the surrogate has signed an agreement of competent authorities with Brazil and is in force by July 31st 2017;

IV - the jurisdiction of the surrogate entity has not been notified by the Brazilian IRS for the occurrence of systemic failure (create difficulties to exchange info); and

V - the surrogate entity informs its tax authorities that is the reporting entity.

Regarding the exchange information process, Brazil signed the Multilateral Competent Authority Agreement with OECD on October 2016. However, this does not remove the requirement to have a Competent Authority Agreement (CAA) between Brazil and the reporting entity’s country.


Specifically for FY 2016, by means of an amendment in the CbCR rules, the Brazilian IRS has passed a temporary rule allowing Brazilian entities, members of a foreign MN groups, to designate the ultimate controller as the reporting entity, irrespective if resident in a jurisdiction that does not yet have a Competent Authorities Agreement (CAA) in force with Brazil. This rule will be valid until December 31st, 2017.


In the event that a CAA between Brazil and the jurisdiction of the reporting entity is not concluded until December 31st, 2017, the Brazilian subsidiary shall, within 60 (sixty) days, amend the CIR return (ECF) by submitting the CbCR or indicating a surrogate entity that presented the FY2016 CbCR on behalf of the entire MN group.

Marcelo Sampaio
Partner - Head of Tax

Gustavo Amorim
Partner - International Tax

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