In Normative Instruction 1,709/2017 (NI 1,709/2017), Brazil recently amended its country-by-country (CbC) reporting rules to include a "transitory rule" for 2016 that provides filing relief to Brazil constituent entities whose "ultimate parent entity" (UPE) is located in a jurisdiction with which Brazil does not have a qualifying competent authority agreement (QCAA) on the exchange of CbC reports. This change is consistent with the guidance issued by the OECD on CbC reporting in Brazil. The Normative Instruction also repeals a special rule for reporting joint ventures.

Our law firm clients should note that the release of NI 1,709/2017 provides important relief from the Brazilian local filing requirement for multinational law firms with a UPE outside Brazil. As a result of the amendment, the Brazilian constituent entity is not required to file the group's CbC report in Brazil by July 31, 2017. If no QCAA has been concluded by December 31, 2017, between Brazil and the country where the UPE is tax resident, however, the Brazilian constituent entity will have 60 days to file an amended electronic corporate tax return, the so-called ECF, that either contains the CbC report or specifies which entity will file the CbC report on behalf of the group as surrogate parent entity.

Please see Tax Alert 2017-901 for details.

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