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.
The Spanish Beckham Law Tax Regime
By Carlo Lorusso and Almudena Soler
Commonly known as “Beckham law,” the Spanish Special Expat Regime is regulated by the Spanish Personal Income Tax Law. According to Article 93, individuals who acquire their tax residence in Spain might choose to be taxed under Spanish Non-Residents Income Tax rules instead of the Personal Income Tax rules for resident individuals, provided that certain conditions are met.
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 2
By David Roberto R. Soares da Silva
Part 2 of this work addresses the income tax rules applicable to transactions involving foreign trusts and Brazilian resident parties, contemplated in the Complementary Law Project No. 145/2022 (PLP 145), submitted by lawmaker Eduardo Cury to Brazil’s House of Representatives in late 2022.
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).
Brazil’s House Commission Approves CFC Rules for Individuals
By David Roberto R. Soares da Silva
At the end of the 2022 legislative year (Dec. 14), the Finance and Taxation Commission (CFT) of Brazil’s House of Representatives approved a bill that ends the tax deferral of profits from offshore companies to individuals (CFC rules).
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.
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.
Compliance in Brazil: Internal Investigations and Disciplinary Measures
Once the complaints have been received through the appropriate channel or even once the company becomes aware of potential violations by other means, it is time to conduct internal investigations to ascertain whether there are grounds for such complaints. If so, the organization has to take action according to the legislation and its internal rules.