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New Brazilian tax obligation: The Country by Country Report. The BEPS initiative in Brazil.

*Leandra Guimarães and Luiza Vidal

From 2017 (regarding the fiscal year of 2016) on, all legal entities resident in Brazil for tax purposes which are members of multinational enterprise (MNE) groups must be aware of a new tax obligation. It consists of the Country by Country Report (CbC Report), introduced by Brazilian IRS Normative Ruling n. 1.681/2016 (IRS NR #1.681/2016). The CbC Report must be filed through the Brazilian Corporate Income Tax Return.

The creation of the CbC Report results directly from the access of Brazil to international initiatives arising from the BEPS Project, headed by the Organization for Economic Cooperation and Development – OECD and by the G20 (the 20 major economies in the world).

The BEPS Project began when, following the release of the “Addressing Base Erosion and Profit Shifting – BEPS” Report by the OECD, members of the organization and of G20 joined forces to create a 15-point Action Plan to address BEPS and risks associated to it.