Brazil: Brazil Amnesty Program (RERCT) And Trusts

Last Updated: 25 May 2016
Article by Camilla Arno Sant'Anna and Stephanie E. Heilborn

Since its inception, Law no. 13.254/2016,1 which establishes the legal provisions of the so-called Brazilian amnesty program (Regime Especial de Regularização Cambial e Tributária [RERCT]) for undeclared foreign assets, has generated many questions and some controversy. One of the main issues still not clearly addressed by the regulators is the treatment of trusts.

The law establishes the legal provisions for the voluntary declaration and regularization of unreported assets of lawful origin held abroad on or before December 31, 2014, by Brazilian residents or persons domiciled in Brazil. Taxpayers who wish to participate in the program need to file a regularization declaration (Declaração de Regularização Cambial e Tributária [DERCAT]) with the Brazilian IRS (Receita Federal Brasileira) and pay (i) income tax at a rate of 15% and (ii) a fine in an amount equal to 100% of the income tax due. An additional requirement is the amendment of the taxpayer's annual tax return for the 2014 calendar year.2

The 210-day period for filing the DERCAT was triggered by the publication of IN RFB No. 1627, issued by the Brazilian IRS on March 11, 2016 (Regulation 1627). In accordance with Regulation 1627, compliance with the program can be effected between April 4 and October 31, 2016.


Regulation 1627 also provides some clarification on disclosing assets held in a trust. First, it clarifies that the description of the assets on the DERCAT must include assets that have been transferred, directly or indirectly, to any type of trust, foundation or pass-through entity.

As set forth in Regulation 1627, the value of the declared assets corresponds to (i) the amount of such assets on December 31, 2014, if the declaring taxpayer or his or her representatives are the effective beneficiaries; or (ii) the value of the transferred assets, if the beneficiary is a third party.

The obligation to file the DERCAT and rectify the tax return falls upon the beneficiary of the trust or foundation. However, the settlor also has the option to file a DERCAT on the beneficiary's behalf.

Any person or entity participating in the RERCT must retain in its possession for a period of five years from the delivery of the DERCAT all documents supporting such filing, including, specifically for trusts: (i) identification of the settlor, the trustee and, if applicable, the protector; (ii) the trust documents (e.g., trust agreement, letter of wishes, and equivalent documents); (iii) a list of assets under the trust; and (iv) the accounting information prepared by the trustee or an accountant and approved by the protector, if applicable.


The treatment given by the Brazilian IRS to the disclosure and regularization of assets held in trusts is incompatible with the very nature of such instruments.

A trust can be either revocable or irrevocable. When a trust is revocable, i.e., when its provisions can be altered and/or the trust can be revoked by the settlor at any time during his or her lifetime, the trust assets are still considered part of the settlor's property for tax purposes. The settlor must include such assets in his or her annual tax return and pay taxes on any income earned by the trust during the relevant calendar year.

Therefore, it should be the settlor, rather than the beneficiaries, who is the party responsible for filing the DERCAT and paying the related taxes and fees. Regulation 1627 does allow the settlor to file the DERCAT, but adhering to the RERCT is only deemed completed when the taxes and fines are paid. Considering that the beneficiaries still must file and pay the relevant amounts themselves, regardless of whether the settlor joins the program, this alternative would result in double taxation.

Even when a trust is irrevocable (i.e., when the settlor transfers the property definitively to the trust and cannot alter its terms), the property should not be deemed part of the beneficiaries' net worth. Often, the trust agreement provides the trustees with discretion in distributing property: hence any individual beneficiary may or may not receive a portion of such property, and such distribution may happen only at a future date. Further, it is not uncommon for a trust to be created without the beneficiaries' knowledge. In this case, disclosure of the trust's existence by the trustee to allow the beneficiaries to file the DERCAT could constitute a violation of the trust's terms and conditions and a breach of the trustee's fiduciary duties.

Finally, it is important to consider the impact of the amnesty program and the payment of taxes to the Brazilian authorities against the disclosure and filing requirements in other countries, such as the USA. In the absence of a tax treaty (which is the case with the USA), this could generate the obligation to pay taxes on the declared assets in both countries.


The RERCT is a good alternative that allows Brazilian citizens and residents to regularize their situation with the Brazilian IRS. It still, however, brings uncertainty to the treatment of foreign instruments that were not acknowledged by Brazilian regulators until now, such as trusts. Therefore, careful planning must be employed before joining the program to allow the continuity of the structures implemented abroad and proper compliance with local regulations, as well as broader cross-border regulatory issues and risks such as those related to money laundering.


1. See

2. The requirements also include the (i) amendment of the Report of Foreign Assets (DCBE) for the calendar year of 2014; (ii) disclosure of documents that support the lawful origin of the assets, if required by the authorities; (iii) request and authorization for the foreign financial institutions holding assets in excess of USD100,000 to remit information regarding the balance of such assets on December 31, 2014.

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