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Federal Law 13,428 was enacted in March 30th 2017 ruling the reopening of the Brazilian Special Regime for Tax and Exchange Legalization (“RERCT”), taking into consideration the success of its first version, which represented an extra revenue for tax authorities in 2016 of over BRL 45 billion.

The main objective of the regime remains the same, i.e., to regularize resources, assets and rights of legal background, not declared or declared improperly, remitted or kept abroad, or even repatriated, by Brazilians residing in the country in June 30th 2016, from both a tax and a criminal perspectives.

Note that the new deadline to file this optional procedure will be July 31st 2017 and the applicable overall cost (income tax + penalty) for joining has increased from 30% to 35.25%, as a way to punish stragglers. Besides, in order to converse the asset value to BRL, the taxpayer will have to use the USD exchange rate from June 30th 2016, of 3.2098, higher than that of the first season (2.6562).

Notwithstanding, we still consider this amnesty program as an unprecedented way to legalize the situation of those Brazilians who hold undeclared assets abroad, specially bearing in mind the current context of intense exchange of information among tax authorities throughout the world.