DME. The Federal Revenue Service (RF) has released the Manual for Completing the Declaration of Transactions Settled in Cash (DME). This publication is related to the implementation of RFB Normative Instruction No. 1,761, of 2017.
The DME Manual can be obtained on the RF’s website. Click here. The DME is available in the Institution’s Services area.
Who must submit the DME
Natural or legal persons residing or domiciled in Brazil are required to submit the DME. Those who, in the reference month, have received amounts in cash arising from transactions carried out with one and the same natural or legal person. Even if in part or in whole in foreign currency.
When the transaction is settled in foreign currency, the transaction must be converted into reais for the purposes of the declaration.
If an establishment receives cash payments from 100 clients in a month and for 50 clients the sum of the transactions carried out with each of them does not reach the amount of R$ 30 thousand in the month, there is no DME to speak of for such clients.
If, for another 49 clients, the transactions carried out with each client reach or exceed the amount of R$ 30 thousand in the month, but the amount settled in cash, for each client, was below the aforementioned limit, there is also no DME to speak of for such clients.
Finally, with respect to transactions carried out with one of its clients, considering that the amount settled in cash is equal to or greater than R$ 30 thousand in the month, in that case, it is necessary to submit a DME for each transaction carried out with that client.
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Reason
The need for the Tax Administration to receive this information stems from the fact that transactions settled in cash have been used to conceal acts of tax evasion, corruption, and money laundering. Especially when the beneficiaries of illicit funds use them in the acquisition of goods or services. And do not intend to be identified by the tax authority.
Reporting significant cash transactions to the tax authorities has been a direction adopted by several countries. As a measure to combat the practice of financial crimes, among which money laundering and the financing of arms trafficking and terrorism.
The aim is not to identify the current stocks of physical currency held by natural or legal persons. But to identify the use of these funds when these persons actually settle various acquisitions.
Failure to submit the DME, or its submission after the deadline or with inaccuracies or omissions, subjects the declarant to a fine.
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