Over the past two years, the Brazilian authorities and the country`s Central Bank have aggressively prosecuted violations of money laundering laws, including a law passed last year that expanded the types of illegal activities related to money laundering. But before Brazil could reach a FATCA agreement with the United States, Brazil had to ratify the 2007 TIEA. Under pressure from Brazilian tax authorities, the Central Bank and the Ministry of Foreign Affairs, Brazil`s foreign policy body finally resumed debate on TIEA in the Senate at the end of February, leading to recent approval. There are 02 (two) forms of information exchange made possible by TIEA and other agreements signed by Brazil. This is the automatic exchange of information (which depends on the implementation of appropriate legal and technical structures) and the exchange of information on request. Tax agreements and totalization agreements have been saved Brazil maintains the following totalization agreements: after the adoption of FATCA, sovereign nations were pushed by national financial institutions to either allow them to provide tax information to the U.S. government or to subject them to a 30% tax on all payments from U.S. sources. One of these sovereign nations is Brazil, which signed a tax information exchange agreement (TIEA) with the United States in 2007 but would not have been ratified, which would at least allow the exchange of information between governments.

It is certain that the adoption of FATCA will accelerate both the ratification of TIEA in Brazil (which took place six years later, in 2013) and the signing of the Intergovernmental Agreement (“IGA”) on the implementation of FATCA`s provisions in Brazil. We will discuss these two agreements in the themes below. Brazil has approved and implemented a Tax Information Exchange Agreement (TIEA) with the United States. Brazil`s approval of TIEA was based on the effects of the U.S. Account Compliance Act (FATCA). Opposition to TIEA had been strong, particularly from a senator who had previously headed brazil`s Ministry of Finance, arguing that the provision of tax information to the United States (as requested by FATCA) had violated Brazil`s sovereignty and the rights of its citizens and that the agreement was unconstitutional.