How to regularize assets and rights through the General RERCT in Brazil and abroad

O Special Regime for the General Regularization of Foreign Exchange and Tax Assets (RERCT-Geral)created by Law no. 14.973/2024offers the opportunity to regularize undeclared assets in Brazil and abroad.

This scheme is a government initiative to encourage tax compliance and bring more legal certainty to taxpayers, allowing assets held until December 31, 2023 to be legalized.

What is the General RERCT?

The General RERCT was designed to facilitate the regularization of assets that, for whatever reason, were not properly declared to the Internal Revenue Service. With this program, individuals and companies can correct omissions and avoid legal sanctions by paying taxes and fines.

It covers both assets held in Brazil and abroad, providing an opportunity for taxpayers to legalize their holdings in a simplified way.

Who can take part?

The scheme is open to any individual or legal entity resident in Brazil who has assets of lawful origin that have not been duly declared by the end of 2023. Among the assets that can be regularized are:

• Real estate;
• Bank accounts;
• Shareholdings;
• Financial investments;
• Vehicles;
• Insurance policies;
• Trademarks and patents.

The only restriction is that the assets and resources must be of lawful origin, as assets of illicit origin are not eligible for regularization.

Eligibility criteria

To participate in the General RERCT, taxpayers need to meet three essential requirements:

1. Submission of a Declaration of Exchange and Tax Regularization (Dercat)In this declaration, assets and rights that have not been declared correctly must be reported.

2. Payment of income taxTaxpayers must pay a rate of 15% on the total value of the regularized assets, calculated on the basis of the value in reais up to December 31, 2023.

3. Regularization fine: In addition to income tax, a fine corresponding to 100% of the tax amount must also be paid.

How to make the declaration

The process of signing up to the General RERCT is digital and can be done through the Virtual Taxpayer Assistance Center (e-CAC) of the Federal Revenue Service. The whole procedure is easy and can be completed in two simple steps:

1. Access e-CAC using your credentials.

2. On the portal, select the "Present Dercat" option and fill in the necessary information about the assets you wish to regularize.

Once the tax return has been submitted and the amounts due have been paid, the taxpayer will be in compliance with their tax obligations.

Rate and calculation basis

Regularized goods will be subject to a tax rate of 15% on the total value of assets, calculated up to December 31, 2023, without any deduction. In addition, an additional penalty of 100% is levied on the income tax, resulting in a total cost of 30% on the regularized value. This amount must be paid in full in national currency.

Deadline for membership

Those interested in joining the General RERCT must complete the regularization by December 15th, 2024. After this deadline, taxpayers who have not regularized their assets will be subject to additional sanctions, such as fines and interest, as well as possible legal action. It is therefore important that all steps are completed within the stipulated timeframe.

Consequences of non-compliance

Taxpayers who do not adhere to the RERCT-General on time risk facing severe penalties, which include:

• Additional fines and interest;
• Legal actions for asset theft;
• Possible seizure of undeclared assets;
• Damaged reputation in future legal and tax proceedings.

These consequences make joining the regime a smart choice for those who want to avoid further complications with the IRS.

Benefits of joining the General RERCT

The General RERCT offers various benefits for taxpayers who join, such as:

• Legal certaintyRegularization of assets eliminates the risk of future legal sanctions.
• Simplified processAdherence to the regime is completely digital, allowing taxpayers to regularize their assets quickly and practically.
• Fiscal transparencyRegularization ensures that assets and resources are duly registered, giving taxpayers peace of mind about their tax situation.

Read more about: RERCT-Geral: regularize your assets and rights safely

Final considerations

Joining the General RERCT is an excellent opportunity for individuals and companies to regularize their tax situation and avoid future complications. With a deadline of December 15th, 2024The regime offers a simple and safe solution for those who have undeclared assets, allowing their assets to comply with current legislation.

To ensure that the process is carried out correctly and on time, it is advisable to rely on the advice of accounting experts. A CLM Controller offers specialized support in adhering to the General RERCT, providing efficient and secure solutions for the regularization of assets in Brazil and abroad.