Individuals and businesses in Brazil that are involved in international transactions have new registration requirements. These unique requirements relate specifically to services and may be the only ones of their kind in the entire world.
The Brazilian government now requires the registration in its online Siscoserv database of any operations of Brazilian legal entities and individuals that import or export services. The services must produce variations in the equity of the entity or the individual, which most often refers to the making or receiving of a payment.
The reporting requirements went into effect in October 2012.
Siscoserv stands for Integrated System of Foreign Trade in Services, Intangibles, and Other Operations that Produce Variations in Equity. It is a computerized online system developed by the Brazilian federal government that allows for the monitoring of foreign services transactions.
The registration mandate includes such service areas as legal, accounting, construction, installation and maintenance of computers and machinery, publication, printing, reproduction, architecture, engineering, veterinary, marketing, design, and beauty treatment.
Under the provisions of Siscoserv, the party to the transaction that has the reporting obligation is the Brazilian individual or legal entity. This includes:
- The lender or receiver of the services that is resident or domiciled in Brazil;
- Those resident or domiciled in Brazil or abroad transferring or acquiring services or intangibles, including intellectual property rights, through any legal method; and
- Those resident or domiciled in Brazil or abroad performing other operations that produce variations in equity.
Individuals or entities that engage in transactions that fit in one of the above categories must report the required information to Siscoserv within 30 to 180 days of the transaction, depending upon the situation. The failure to comply with the law carries a penalty of R$5,000 per month, per transaction, in the event of a delay, and 5% of the transaction value in the event of omission or inaccuracy.
Siscoserve Modules
The Sales Module is used to register the operations of the sales of services, intangibles, and other operations that produce variations in equity by a Brazilian person or entity. This module also covers transactions that are performed through a commercial presence outside of Brazil.
The Acquisition Module is used to register the operations of the acquisition of services, intangibles, and other operations that produce variations in equity by a Brazilian person or entity.
Due to the newness and complexity of Siscoserv, there is a significant amount of analysis and planning that must take place to meet these rather stringent registration requirements. It is essential that individuals and businesses importing or exporting services seek legal advice to comply with the law and avoid potential penalties.
