Brazil: Use Of Data Protected By Bank Secrecy For The Purposes Of Tax Requirements - Brazilian Legislative And Case Law Scenario

The discussion on the possibility of breaking the bank secrecy has been giving rise to great controversy in Brazil and worldwide, in view of the rules that protect intimacy and privacy as well as the impact, many times negative, of the disclosure of financial transactions on the personal life of individuals and the competition among the companies.

The continued deadlock between the financial institutions that try to protect their clients' interest and the pressure exerted by governments given the increasing omission of income, which stealthily takes away huge amounts of unpaid taxes, especially in countries that have rules that prohibit or restrict the disclosure of data of individuals or companies that hold bank accounts or have investments in their jurisdictions.

The Brazilian Federal Constitution guarantees the right to intimacy and privacy and the inviolability of correspondence and confidentiality of data and telephone communications. In these last two cases, the disclosure to applicable bodies upon court order is permitted but only in the events and in the form provided for in law, for the purposes of a criminal investigation or supporting a criminal procedure.

The Brazilian constitution clearly prescribes that the confidentiality may be broken only upon a court order in a lawsuit regularly brought. This means that the tax authorities have no power to access the data by simply opening an administrative procedure. However, as we will comment below, the Brazilian Tax Authorities have been understanding that the confidentiality protection may be circumvented without a court order.

To address specifically the protection of bank data, in 2001 the Supplementary Law no. 105 was enacted to set out the general rule on the confidentiality of active and passive transactions and the services provided by financial institutions.

But that same Supplementary Law allows the analysis of documents, books and records of the financial institutions, including those related to deposit accounts and financial investments, by tax agents, regardless of a court order, provided that an administrative procedure had been opened or a tax procedure is under way, and that the analysis had been considered indispensable by the applicable administrative authority.

The Supplementary Law 105/01 was regulated by a Decree, which establishes the events in which the tax agents may break the bank secrecy directly, for example, omission of income or net gains derived from fixed or variable income investments and realization of expenses or investments in an amount above the available income.

The Decree also establishes that the taxpayer must be given prior notice to supply information and documents voluntarily, and, only if the taxpayer fails or refuses to do so, such information and documents may be directly requested to the financial institutions where the taxpayer has accounts or that intermediate the taxpayer's investments.

In case of omission or supply of false information to the tax agents, severe penalties — which are imprisonment and pecuniary fine — are imposed so that the taxpayers and in particular the financial institutions are compelled to disclose the requested bank data, in spite of the fact that the Constitution guarantees the right to intimacy and privacy as well as to the confidentiality of the data of individuals.

The discussion therefore is centered around whether the rule set out in Supplementary Law no. 105/01, which permits that the bank secrecy be breached directly by tax agents, without a court order, violates the right to privacy and intimacy and to confidentiality of data guaranteed by the Brazilian Federal Constitution.

As mentioned above, the Federal Constitution admits the disclosure of data of individuals only by order of a court and, even so, if a criminal investigation is being carrying out or to support a criminal case, and does not provide that the bank secrecy may be breached directly by tax agents for the purpose of inspection or collection of tax liabilities.

The rule that permits breach of bank secrecy with no need for a court order clearly conflicts with the provisions in the Brazilian Federal Constitution, as it confers upon the tax authority, which is not unbiased because it is a direct participant in the tax authority-taxpayer relation, power to require bank information that in principle are confidential and may be revealed only upon a court order.

A court order is needed for the bank secrecy to be broken to protect the taxpayers from arbitrary impositions and guarantee their right to be heard, which is prescribed in the Constitution, and to prevent tax authorities' abusive and indiscriminate demands of bank information, which sometimes is not even necessary.

Only the Judiciary is truly impartial to determine if a concrete situation demands disclosure of the taxpayer's bank data and, even so, such determination does not dispense with an opportunity for the taxpayer to dispute the requirement.

The Federal Supreme Court has already pronounced on this matter in the decision rendered in 2011 in Extraordinary Appeal no. 389.808. The majority of the Justices decided that the bank secrecy cannot be broken except upon a court order, and declared that the provision in Supplementary Law no. 105/01 is unconstitutional.

As that Federal Supreme Court's decision produces effects only on the parties to the case (as it concerns an individual appeal filed by a given taxpayer), in practice the tax authorities will keep on requesting the taxpayers' bank data without a court order, and those omitting them will be subject to imprisonment and/or imposition of fines.

In spite of that decision, the Brazilian Supreme Court — the court that has the last word in the matter — has not yet achieved a consolidated understanding, and this is so true that currently the analysis by the Federal Supreme Court of some cases to render decisions that will produce general effects throughout Brazil and will be valid for the entire society is being expected. While such cases are still to be examined, the insecurity about the understanding that will prevail will persist.

The conclusion therefore is that the issue of bank secrecy has not yet been solved in Brazil and many are the conflicts between the tax authorities and the taxpayers over this matter, whereas only the Brazilian Supreme Court may settle this issue once and for all by putting an interpretation on it and ensuring an uniform application of the rule to the transactions carried out in Brazil.

The companies and individuals that have a bank account in Brazil will have to continue to face the possibility of the Brazilian Federal Revenue bothering them as it may try to access directly — that is, without a court order — bank data to collect any tax that supposedly was not paid by the taxpayers. We expect that the Supreme Court, grounded on the Brazilian Constitution, will impede that such arbitrariness continues.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions