Brazil’s new tax regime for financial investments, CFCs, and trusts held abroad
By David Roberto R. Soares da Silva
Through Provisional Measure No. 1.171/2023 (MP 1171), published in an extra edition of Brazil’s Official Gazette on April 30, 2023, the Lula Government substantially altered the way financial investments abroad, including those made through offshore companies and trusts, should be taxed. If approved by Congress, the new rules will take effect on January 1, 2024.
Foreign trusts and the Inheritance and Donations Tax in the state of São Paulo
By David Roberto R. Soares da Silva
In a recently published ruling, the São Paulo Treasury Department ruled for the first time about the Inheritance and Donations Tax (ITCMD) aspects related to foreign trusts, especially regarding its levy and taxable event.
Tax treatment of foreign trusts in Brazil: A commentary to Bill 145/2022 – Part 1
By David Roberto R. Soares da Silva
Without much fanfare, Brazil’s House of Representatives is reviewing a complementary law project that proposes to regulate the effectiveness of foreign trusts in Brazil and their respective tax treatment. The law project has no relation to the bill already under discussion in Congress on the possibility of creating a sort of Brazilian trust (the so-called fiduciary contract).
Understanding Brazil’s Interest on Equity
By David Roberto R. Soares da Silva
Created in 1996, the interest on equity (juros sobre capital próprio, or JCP) is a mechanism available to certain Brazilian companies to compensate their equity holders in addition to profits and dividends.
Automatic exchange of information and expatriates working in Brazil
By David Roberto R. Soares da Silva and Felipe Pereira Louzada
In an increasingly globalized world, Brazil proves that workers’ global mobilization is also a reality in emerging countries. But globalization has also added complexity when it comes to tax reporting by expatriates leaving overseas, and Brazil is no different.
Brazil: A new voluntary disclosure is coming
By David Roberto R. Soares da Silva
Exactly five years ago, the first foreign asset voluntary disclosure program in our history began in Brazil. Called the Special Regime for Currency and Tax Regularization (RERCT), it became known as ‘amnesty.’
Despite the precarious drafting of the law and threats from the Federal Revenue Service, the program successfully allowed the collection of almost BRL 170 billion in taxes and fines. In 2017, the Government reopened the RERCT, but with more modest results.
Well, maybe soon we will have a new “RERCT round 3” that reopens the opportunity for taxpayers to regularize assets abroad that have not been properly declared to the Brazilian authorities.
Foreign capital registration in Brazil – An Overview
By David Roberto R. Soares da Silva
Foreign capital entering Brazil requires registrations that varies depending on its purposes. The Central Bank of Brazil is the authority in charge of foreign capital registration through the Electronic Declaratory Registry (Registro Declaratório Eletrônico, or RDE).
The First Income Tax Return for Expatriates Residing in Brazil
By David Roberto R. Soares da Silva
As of today (March 1, 2021), Brazilian resident individuals have to report their taxes to the Federal Revenue Department by filing their annual tax returns. The deadline for the filing is April 30, 2021, and it applies to expatriates residing in Brazil in 2020.
Expatriates coming to work in Brazil must take some precautions when preparing their first Brazilian annual income tax return. Some mistakes and errors made in the first tax return may cause unnecessary and undesirable effects in the future.
Acquiring Brazilian Residency for Tax Purposes
By David Roberto R. Soares da Silva
Like most countries, Brazil taxes individuals based on their residency rather than citizenship or other criteria. Therefore, determining a person’s residence in Brazil directly impacts that person’s tax treatment and tax reporting obligations.
Exposure of foreigners to Brazilian succession laws, probate, and taxes
By David Roberto R. Soares da Silva
Foreign individuals with property in Brazil may be subject to local succession laws and probate if they hold property in their name or are married to a Brazilian spouse or have Brazilian children.