Foreign nationals, who are tax-resident in Brazil, are required to pay tax on their Brazilian and overseas-generated income, unless covered by Double Taxation Treaty between Brazil and their home country, and must file an annual tax return and CBE every April.
Annual Tax Declaration - "Imposto de Renda"
Brazilian Government announced that the annual tax declaration is from March 1st to April 30th, 2021. The referred declaration is called "Imposto de Renda".
In this regard, we remind that foreign nationals, who are not tax-resident, are required to pay tax only on their income from Brazilian sources. Anyhow, they do not have to file an annual tax return, unless they have properties located in Brazilian territory, when it is recommended (or mandatory, in same cases) to proceed with the annual tax declaration.
Declaration to Brazilian Central Bank of Assets Held Abroad - "CBE"
Foreign nationals, resident in Brazil, have to observe another declaration required by Brazilian Central Bank (CBE).
In this way, all individuals and companies (legal entities), considered by the law resident in Brazil, must file the annual information return to Brazilian Central Bank (in a digital form), in order to declare assets of any nature amounting to or exceeding one million US Dollars (USD 1,000,000.00) on the base date December 31st, 2020.
This mandatory declaration went up from USD 100,000.00 to USD 1,000,000.00, according to new regulation of "Resolução n. 4.841/2020".
Among the assets that must be reported, are the following: cash deposits, loans, leasing, investments, founds, properties and other type of assets.
There is a lack of information and divergences about how to declare Trusts constituted abroad, once this legal institute is not included or equivalent in Brazil.
Annual Declaration - amounts equal or above than USD 1,000,000.00.
February 15th to April 5th, 2021.
Quarterly Declaration - amounts equal or above USD 100,000,000.00.
March 31st base date - April 30th to June 5th, 2021.
June 30th base date - July 31st to September 5th, 2021.
Base date September 30th - October 31st to December 5th, 2021.
Corporate interests held abroad, including Holdings and Offshores, have to prepare a specific Balance Sheet for the legal entity located abroad for the base year of 2020 before delivering the due declaration to Brazilian Central Bank (CBE), which may be prepared by an accounting office and legalized in Brazil. It is also necessary to observe international regulations (IFRS - International Financial Reporting Standards).
The penalty for incorrect information or for not filling the information required by Brazilian Central Bank may reach two hundred and fifty thousand Brazilian Reais (BRL 250,000.00) per year, with the possibility of a 50% increase in some specific cases. Failure to report the correct information may be considered also as a crime of capital evasion.
Both annual tax and Brazilian Central Bank declarations are considered confidential.
Mateus & Felipe Klein Advogados is ready to assist you in complying with these obligations.
Visit Us | mfklein.com