Normative Instruction 1,722/2017 published in Brazil’s Official Gazette on 17th July 2017 amends Normative Instruction 1,681/2016 relating to guidance on CbC reporting. According to NI 1,722/2017, transitional provisions apply if a legal entity which is resident in Brazil for tax purposes and which is not the ultimate controlling company of a multinational group has not designated a substitute entity for filing the CbC report on behalf of the group.
Under the transitional mechanism the tax authorities would accept a notification that the ultimate controlling company of the multinational group is located in a jurisdiction that has no competent authority agreement for the automatic exchange of CbC reports in force with Brazil; or that it has a competent authority agreement for the automatic exchange of CbC reports in force with Brazil that is in force for years beginning from 1 January 2017.
In the latter case the Brazilian entity could be required to file a CbC report within a deadline of sixty days if the competent authority agreement is not implemented (retroactively to 1 January 2017) by 31 December 2017; or if the other jurisdiction requires a CbC report from one or more entities whose ultimate parent company is tax resident in Brazil.
