As of 1 January 2018, individuals or legal entities, resident or domiciled in Brazil, who receive in cash, at any given month, amounts equal to or exceeding BRL 30,000 (approximately EUR 7,600) (regardless of the currency), must submit a Declaration of Transactions Liquidated in Cash (DME) to the Brazilian Federal Revenue Service (RFB). Financial institutions and institutions authorised to operate by the Central Bank of Brazil do not have to comply with this obligation.
If the payment is made by more than one individual or legal entity, with respect to the same transaction, the declarant must observe the limit of BRL 30,000 with respect to each transaction and not with each payor. Thus, for example, if a person sells a vehicle to a couple for BRL 50,000, and each one of them pays BRL 25,000 to the declarant, the transaction must be declared despite the declarant receiving less than BRL 30,000 from each one.
The declarant will have to give the following information in the DME with regard to each transaction: the full name of the individual or legal entity; the taxpayer’s number (CPF or CNPJ); the description of the goods, services or rights that generated the payment in cash; the transaction amount in BRL; the value in BRL liquidated in cash; the currency used in the transaction and its date. In case the transaction has been carried out with an individual or legal entity domiciled abroad, without a taxpayer number in Brazil, the declarant must inform about the Tax Identification Number (NIF) and the country of residence or fiscal domicile of the individual or legal entity abroad.
The electronic DME form must be filed by accessing the Centro Virtual de Atendimento ao Contribuinte (Taxpayers’ Virtual Service Centre – e-CAC) on the Brazilian RFB’s website at the address http://rfb.gov.br. The DME must be digitally signed by the individual or the legal representative of the legal entity, or by a duly constituted attorney-in-fact, by means of a valid digital certificate. Amounts received in foreign currency will be converted with the exchange rate for the currency, disclosed by the Central Bank of Brazil, corresponding to the business day immediately preceding the day of the receipt. If the exchange rate of the foreign currency at issue is not disclosed by the Central Bank of Brazil, the value must firstly be converted into US dollars, based on the value established by the monetary authority of the country of origin of the currency, corresponding to the business day preceding the date of the receipt, and then into BRL.
The deadline for submission of the DME to the RFB will be the last business day of the month following that of receipt of the cash and it will be possible to rectify it afterwards. Failure to submit, delayed submission, or submission with inaccuracies or omissions will result in the imposition of penalties by the RFB and, despite payment of these penalties, the RFB may inform the Federal Public Prosecutors in case of evidence of money laundering crimes or concealment of assets.
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