18 April 2016
On April 15, 2016, Legislative Decree no. 105/2016 was published in the Official Brazilian Gazette, approving the text of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, signed by Brazil in November of 2011.
This administrative assistance, which is the purpose of the Convention, includes: (i) the exchange of information, including simultaneous tax audits and participation in tax audits carried out abroad; (Ii) collection of tax credits, including precautionary measures and (iii) document notification.
Five categories of information exchange are established in the Convention, such as: (i) by request; (ii) automatic; (iii) spontaneous; (iv) simultaneous tax audits and (v) tax audits abroad.
The Convention, signed in 2011, reflects Brazil’s commitment at the Summit of Cannes, where the G-20 members intensified their fight against fraud and international tax evasion, with efforts to mitigate aggressive tax planning practices.
As an explanatory memorandum, the Convention's purpose is to promote cooperation in tax matters at a multilateral level, thereby balancing the exchange of information between tax authorities with respect for the fundamental rights of the taxpayer. Moreover, the Convention is also an instrument for the effective application of Brazilian law, allowing tax authorities to obtain the required information as evidence of illicit tax practices outlined in the Brazilian legal system.