Brazilian Revenue Implements Offshore Credit Card Initiative

On July 16, 2003, the Official Gazette of the Union published Normative Instruction No. 341 of the Federal Revenue Office which created the Statement of Transactions with Credit Cards (DECRED). The Instruction compels credit card companies to report information on transactions, including the users of the cards and their global monthly amounts of activity. The Instruction however appears incompatible with Brazilian laws on bank secrecy, which requires that exceptions to bank secrecy be determined by federal law, rather than decree. The Instruction is intended to combat tax evasion and may have emulated foreign tax agencies? practices, but in doing so may have overstepped its legal authority.