The Federal Revenue Service published in the Official Gazette of the Union Normative Instruction RFB No. 1729/2017, which amends the rules of the National Registry of Legal Entities (CNPJ). The agency states that the change allows the concept of ultimate beneficial owner to be better delineated.
According to a note published on the Federal Revenue Service’s website, the amendments relate, essentially, to matters concerning ultimate beneficial owners, considered by the rule to be “the natural person on whose behalf a transaction is conducted” or “the natural person who, ultimately, directly or indirectly, owns, controls, or significantly influences the entity”.
The Federal Revenue Service emphasizes that knowledge of the chain of corporate ownership, up to the identification of the ultimate beneficial owners of legal entities and legal arrangements, has proven to be an important challenge for the prevention of and fight against tax evasion, corruption, and money laundering worldwide.
This information, according to the agency, is fundamental for the proper accountability and penalization of conduct outside the bounds of the law.
Concepts and innovations initially introduced by Normative Instruction 1634/2016 were the result of studies and debates conducted by federal agencies within the scope of the National Strategy to Combat Corruption and Money Laundering (ENCCLA), promoting transparency and identifying the real beneficiaries of companies and resources invested in the country.
Once the aforementioned amendments are implemented, there will be a significant advance with respect to access to information by oversight, enforcement, and criminal prosecution bodies, the Federal Revenue Service stresses. The agency adds that, contrary to what is recommended in international guidelines, data relating to the effective controllers is not currently available in a timely manner to such authorities, requiring various inquiries, including at the international level, to obtain the information, not always successfully.
Entities that registered with the CNPJ from July 1, 2017 onward were already required to provide information relating to ultimate beneficial owners. Entities already registered before July 1, 2017 were also already required to provide the information upon carrying out any registration change.
Normative Instruction 1729/2017 introduces a modification that allows national entities to fulfill the aforementioned obligations only from the publication of a “specific complementary act” provided for in the rule itself.
Access the Normative Instruction here to learn more.
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