Brazil Erupts With Controversial Reporting of Customer Transactions

Since 2003, the Brazilian Revenue Service (Receita Federal) has received customer information from traditional financial institutions. Banks report transfers and credit card transactions exceeding BRL$2,000 per month for individuals and BRL$6,000 per month for companies. Recently, the Receita Federal sought to expand this reporting requirement, but public pressure and misinformation prompted the government to reverse course.

Here’s how the reporting obligation works. Once the thresholds are reached, banks submit an e-Financeira filing to the Receita Federal. This filing includes the customer’s year-end balances for checking and savings accounts, financial investments, foreign currency acquisitions, and funds transferred abroad. The reporting period is divided in two stages: for the first semester of the calendar year, the deadline is the last business day of August; for the second semester, it’s the last business day of February.

The expanded program, which was ultimately reversed, introduced three changes to this procedure. First, it extended compliance beyond traditional financial institutions to include more companies, such as fintechs and payment institutions. Second, it added transactions using PIX and NFC technologies to the reporting requirements. Third, it raised the monthly thresholds to BRL$5,000 for individuals and BRL$15,000 for companies.

But the changes were doomed from the start, as taxpayers and political opposition perceived them as an attempt by the government to scrutinize individuals and impose taxes on PIX transactions. As a result, just two weeks after the changes took effect, the government revoked the new measures and reverted to the status quo.