Financial Crime World

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Brazil’s Central Bank Raises Thresholds for Financial Crimes Reporting Requirements

The Central Bank of Brazil has published new regulations that increase the thresholds for financial crimes reporting requirements, affecting individuals and legal entities resident in the country. The changes aim to reduce administrative burdens on taxpayers while maintaining robust measures against money laundering and terrorist financing.

Changes to Brazilian Capital Abroad Reports (CBE)

As of September 1, 2020, the CBE will be mandatory for individuals or legal entities holding assets and/or investments outside Brazil worth $1 million or more as of December 31, 2020. The previous threshold was set at $100,000.

  • Many tax residents in Brazil are exempt from this additional obligation
  • The new threshold is $1 million or more as of December 31, 2020

Quarterly CBE Reports

The new rules also introduce quarterly CBE reports for individuals or legal entities with assets and/or investments outside Brazil equal to or greater than $100 million as of March 31 (1st quarter), June 30 (2nd quarter), and September 30 (3rd quarter) of each year.

  • The thresholds for these quarterly reports remain unchanged
  • Reports must be submitted on a quarterly basis

Increased Registration Requirement Threshold

The Central Bank has increased the registration requirement threshold for monetary deposits into bank accounts in Brazilian Reais from $10,000 to $100,000. Transactions equal to or greater than $100,000 must be reported via the electronic system (SISBACEN) starting September 1, 2020.

  • The new threshold is $100,000
  • Reports must be submitted electronically

Purpose of the Changes

The new regulations emphasize the importance of maintaining robust measures against money laundering and terrorist financing while reducing administrative burdens on taxpayers. The Central Bank has stated that these changes aim to promote a more efficient and effective financial system in Brazil.

What Taxpayers Need to Do

Taxpayers affected by these changes should carefully review their financial situations and take necessary actions to comply with the new regulations. It is essential to consult with tax professionals or financial advisors to ensure accurate reporting and avoid any potential penalties.

For additional information, contact your local KPMG representative or one of the following professionals: