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  • #263242

    Luca
    Member

    Soon it will be time to file my first tax return after becoming a permanent resident in 2013.

    I plan on informing all of my foreign assets.
    Can someone walk me through how this declaration is actually made? Do I need to annex documents or do I simply declare that I have 2000 dollars in Bank of America, 1500 dollars in TD Ameritrade, etc?
    Valeu.
  • #263244

    kenalag
    Member

    Got the almost same problem… got permanencia in mid of 2013, too.

    tbird, i guess it is like that… Guess like the slip the shows the balance on 31st of December.
    Ok. Should not be to difficult.
    And then?
    Legalized by the brazilian embassy in the country of origin?
    Translated by a sworn translator?
    But how to to prove:
    -a car?
    -already paid taxes abroad?

    WilliButz2014-02-10 13:07:05

  • #263251

    Luca
    Member

    It looks like you just have to inform the name of the bank, the bank account number and the year-end balance converted to Reais using Banco do Brasil’s exchange rate on Dec 31st.

    From Receita Federal’s website.
    O depì≥sito não remunerado mantido em instituiìßìµes financeiras no exterior deve ser informado na Declaraìßão de Bens e Direitos da seguinte forma:

    1 – Na “Discriminaìßão”, pelo valor em moeda estrangeira, o banco e o nì∫mero da conta.

    2 – No campo “Situaìßão em 31/12/2011 (R$)”, informar o saldo existente em 31/12/2011 constante na declaraìßão do exercì≠cio de 2012, ano-calendì°rio de 2011.

    3 – No campo “Situaìßão em 31/12/2012”, o saldo existente em 31/12/2012, convertido em reais pela cotaìßão de compra para essa data, fixada pelo Banco do Central do Brasil.

    ÂÄ∞ isento o acrì©scimo patrimonial decorrente da variaìßão cambial, o qual deve ser informado em Rendimentos Isentos e Não tributì°veis

    tbird2014-02-10 16:13:43

  • #263252

    kenalag
    Member

    Hmm, makes sense.

    And as it is your first declaration, you just enter the balance “Situaìßão em 31/12/2013” , right?
    I think that we both are declaring peanuts, but i want to sleep well Smile
  • #263256

    miguel
    Participant

    [QUOTE=tbird]

    ÂÄ∞ isento o acrì©scimo patrimonial decorrente da variaìßão cambial, o qual deve ser informado em Rendimentos Isentos e Não tributì°veis

    [/QUOTE]
    Key point too often overlooked by resident expats. A significant portion of your increase in net worth might be accounted for simply by the (locally tax-exempt) appreciation of your home currency.

  • #263257

    miguel
    Participant

    [QUOTE=WilliButz]

    And as it is your first declaration, you just enter the balance “Situaìßão em 31/12/2013” , right?

    [/QUOTE]
    Wrong. That would be too easy. You still have two columns to fill out. The first would reflect the actual date you achieved the “condiìßao de residente.”

  • #263259

    kenalag
    Member

    @miguel: thanks for making clear. Sounds logic and doable. Imagine i entered Brasil on permanent visa the first time in 15 of July 2013, but recieved a salary abroad each month in 2013. No double taxation agreement. Income abroad got taxed abroad. Declaration abroad for 2013 is done, i will recieve the offical tax bill in April. Only salaries from July-December would be relevant for taxation in Brasil, right? I already paid taxes for it, which i can proof with the tax bill. So there should be no more taxation in Brasil. Big BUT: that tax bill from is only on a yearly basis… so should i take the each month? Thanks Willi

  • #263261

    Luca
    Member

    @willibutz you became a resident for tax purposes on July 15. So any income, earned anywhere, from July 15 to December 31 would have been subject to taxation in Brazil.

  • #263262

    Luca
    Member
    So here is a quiz question:
    Gringo enters Brazil on Sep 17 2012 on a tourist visa. He marries and on Oct 22 he applies for a permanent visa. The visa is published on July 30 2013 and on Aug 15 2013 he becomes a registered permanent resident. He did not work during this entire period nor did he leave Brazil.
    When did he become a resident for tax purposes?

    Considera-se residente no Brasil a pessoa fì≠sica:

    I – que resida no Brasil em carì°ter permanente;

    II – que se ausente para prestar serviìßos como assalariada a autarquias ou repartiìßìµes do Governo brasileiro situadas no exterior;

    III – que ingresse no Brasil:

    a) com visto permanente, na data da chegada;

    b) com visto temporì°rio:

    1. para trabalhar com vì≠nculo empregatì≠cio, na data da chegada;

    2. na data em que complete 184 dias, consecutivos ou não, de permanì™ncia no Brasil, dentro de um perì≠odo de atì© doze meses;

    3. na data da obtenìßão de visto permanente ou de vì≠nculo empregatì≠cio, se ocorrida antes de completar 184 dias, consecutivos ou não, de permanì™ncia no Brasil, dentro de um perì≠odo de atì© doze meses;

    IV – brasileira que adquiriu a condiìßão de não residente no Brasil e retorne ao Paì≠s com ì¢nimo definitivo, na data da chegada;

    V – que se ausente do Brasil em carì°ter temporì°rio, ou se retire em carì°ter permanente do territì≥rio nacional sem entregar a Comunicaìßão de Saída Definitiva do Paì≠s, durante os primeiros doze meses consecutivos de ausì™ncia. A partir de 1¬∫ de janeiro de 2010, observar as disposiìßìµes constantes da Instruìßão Normativa RFB n¬∫1.008, de 9 de fevereiro de 2010)

    (Lei n¬∫9.718, de 27 de novembro de 1998, art. 12; Instruìßão Normativa SRF n¬∫208, de 27 de setembro de 2002, art. 2¬∫, com a alteraìßão dada pela Instruìßão Normativa RFB n¬∫1.008, de 9 de fevereiro de 2010)

    tbird2014-02-11 07:06:39

  • #263263

    Luca
    Member

    The answer to the above is: March 20th.

    (Ok so I am having a conversation with myself on a public forum. I know, weird).
  • #263266

    Luca
    Member

    If you have assets worth USD 100,000 or more abroad, you have to file a separate declaration with the Central Bank (CBE – Capitais Brasileiros no Exterior). The deadline is April 7 2014.

    And if you have bought assets, you have to declare the amount in Reais (to Receita Federal). All assets must be converted from dollars to reais. So if you bought a house, say in Germany, you first have to convert from EUR to USD using the European Central Bank’s published rate. Then, you convert from USD to BRL using the Brazilian Central Bank’s published rate. And if you are off a couple of hundred pips on the rate, you will likely end up in the “malha fina” and a whole other can of worms might open.
  • #263272

    kenalag
    Member

    Happily, no major assets to declare… Tongue

    tbird, you are right about the taxation of the income. Unfortunately, salary abroad is automatically taxed… no chance to avoid… So it is already taxed and should not be taxed again… Cry

  • #263285

    erixxxhouse
    Member

    [QUOTE=WilliButz]

    Happily, no major assets to declare… Tongue

    tbird, you are right about the taxation of the income. Unfortunately, salary abroad is automatically taxed… no chance to avoid… So it is already taxed and should not be taxed again… Cry

    [/QUOTE]
    Salary earned abroad should be taxed, what is the issue here? you want it taxed again?

  • #263286

    kenalag
    Member

    @ malboa:

    no, sure i do not want it to be taxed again, as it is already taxed. But as Brazil has the system of taxing the worldwide income, i need to proof that it is already taxed.
    The question is how to prove in a way they accept… sure i can copy all pay slips of the relevant months, but i doubt they understand, nor do they accept.
    The question is how it “should” be like… to avoid problems.

    WilliButz2014-02-11 14:20:13

  • #263301

    Luca
    Member

    @willibutz perhaps you can file for a tax reimbursement abroad for the period that you were not a resident there?tbird2014-02-12 06:48:31

  • #263302

    kenalag
    Member

    @tbird: no chance. different principle of taxation there. If you have a income there, you have to pay.

  • #263304

    Luca
    Member

    [QUOTE=WilliButz]@tbird: no chance. different principle of taxation there. If you have a income there, you have to pay.[/QUOTE]

    Well, that blows. Oh, the joys of an expat Wink
  • #263306

    kenalag
    Member

    No expat. Then they would pay me a contador. Wink

    Just did all paperwork (permanencia etc) in Brazil before finally moving here. With the disadvantage of having two countries of residence for some month and just some salaries from the old, foreign job. And no double taxation agreement anymore Confused

  • #263335

    miguel
    Participant

    There are absolutely no “different” principles of taxation involved here. Think about it.
    Most countries will tax services performed within its own borders (subject to their local exemption amounts), most often by requiring withholding. Regardless of the citizenship or residence of the worker performing the service.
    The “differences” arise in how countries treat income earned outside of its borders.
    Some countries, like Brazil, tax worldwide income based on residence.
    Other countries, exclusively the domain of Eritrea and … the US, tax worldwide income based on citizenship.
    Still other countries do not tax worldwide income at all – but will tax (subject to local exemptions) local-sourced income (services performed within its own borders). The only “difference” here would potentially be the tax rate afforded to residents vs non-residents. And, yes, of course, whether there is in fact a bilateral tax treaty involved.
    miguel2014-02-14 06:36:11

  • #263341

    Anonymous

    [QUOTE=miguel]Other countries, exclusively the domain of Eritrea and … the US, tax worldwide income based on citizenship.[/QUOTE]
    The Philippines used to be in this tony club, too. Until they woke up and smelled the coffee. Today they tax on the principles that most of the rest of the world, civilized or not, apply.

  • #265161

    miguel
    Participant

    [QUOTE=miguel][QUOTE=tbird]

    ÂÄ∞ isento o acrì©scimo patrimonial decorrente da variaìßão cambial, o qual deve ser informado em Rendimentos Isentos e Não tributì°veis

    [/QUOTE]
    Key point too often overlooked by resident expats. A significant portion of your increase in net worth might be accounted for simply by the (locally tax-exempt) appreciation of your home currency.
    [/QUOTE]
    For those folks winding down their local tax return whose home currency happens to be the dollar, the “official” appreciation of that currency vs. the real between YE 2012 and 2013 for RF purposes in net worth calculations (using BC exchange rates), in the simplest case of (non-interest bearing) deposit accounts, is 14.64%.
    That’s a tax-exempt currency gain (Rendimentos Isentos e Nao Tributados) that may be declared in order to justify a potential associated increase in your declared real-denominated net worth owing to that isolated fact.
    Refer to the following link for specific instructions (question #433) (and note the cited instruìßao normativa related to the exempt gain):
    http://www.receita.fazenda.gov.br/PessoaFisica/IRPF/2014/perguntao/assuntos/declaracao-de-bens-e-direitos.html
    (*) Notes: For foreign currency capital gains calculations or for capital accounts in general, the calculations and associated exchange rates are different, and you may be required to use the separate RF program, Ganhos de Capital em Moeda Extrangeira. Also, any taxable interest received during the year on your interest-bearing deposit accounts would have already been declared monthly during the year on your Carne Leao worksheets, and any local tax paid due on that income during the year the month after they were recognized.
    miguel2014-03-31 20:28:42

  • #265999

    Luca
    Member

    I just got back from Receita Federal.

    I went to ask what date I should use for the beginning of my residency in my IRPF 2013. This will be my first ever IRPF in Brazil.
    I should say here that I have not yet filed my IRPF 2013 and I dont know what the program looks like.
    I was told that I should use the date when my permanency was “efetivado.” There is a doubt as to whether it should be the date when my permanency was published or the date when registered at Policia Federal. They suggest that I use the date of my DOU publication. I should NOT use the date when I applied for the permanent visa and received the protocolo.
    With respect to declaring foreign bank accounts – and this is where I am still puzzled, perhaps until I see the IRPF program – she said that I should just inform the ending balance as of Dec 31, 2013 because that is all that I CAN do. There would be no beginning balance as I did not declare IRPF 2012. I asked them if this would not create a problem because effectively I would have accumulated assets in a period when I had no compatible income. She said that I should just “inform somewhere ” (LOL) that I, as Miguel suggested, became a resident on such and such date. Perhaps someone who has done this can tell me the appropriate “campo” to do this.
    Then in the end they said that “se cair na malha fina ì© sì≥ vir aqui explicar, não se preocupa.” LOL

    tbird2014-04-23 09:54:53

  • #266011

    kenalag
    Member

    @tbird:

    as discussed here: YE2012 empty, all information in the text field. I put account info, foreign currecy, reais, etc. and Miguels ” ‘O contribuinte adquiriu a condiìßao de residente fiscal no Brasil em xx/xx/xxxx’;”
    Then you should be safe, too.
    DOU publication date makes sense. Before you where “just a tourist” ;-)
    Cheers
    Willi
  • #266016

    Luca
    Member

    Thank you, WilliButz. Thumbs Up

  • #266019

    kenalag
    Member

    tbird, if we are wrong, we meet for a beer @RFB, ok?

  • #266020

    Luca
    Member

    I know that I am probably worrying waaaay to much about these things.

    Now, let us speculate for a moment shall we. Declaring false information is illegal and none of us would do that. But but…
    what if somone on their first tax return declared the existence of foreign bank accounts with a balance HIGHER than the actual balance. Say, you have 10,000 euros in an account but you declare that you have 100,000 euros. Why would a person not declare a higher amount? I can see where it could become handy in the future (ex. you are a stellar English teacher and make 10,000 reais per months under the table. You cannot otherwise explain where you got the funds to purchase your car or make downpayment on a home). As far as I know, RF doesnt ask to see the actual account statements, at least not in principle. So why not declare money that you dont have?
    Of course this is all hypothetical. Smile
  • #266026

    kenalag
    Member

    tbird,

    no, you are not worriying too much, just as you, i am trying to make this stuff correct, to sleep well. On the other hand, we want to make use of all (little) gaps to save money.
    Somewhere (guess here) i read that foreigners are declaring more foreign money, so they can bring it into the country without hassle/taxes. For example, you know that there will be a mortage heritage expected the next years…
    Generally spoken, i would say that we foreigners have much more space for creativity at the first IRPF, because RFB does not know what is going on abroad. Brazilians are in the system from the cradle to the grave, we are not.
    Big but: if it is a lot, you have to declare it to the BC too. And RFB or BC might ask for documents. And i am afraid the fine mesh will become bigger and more international the next years.
  • #266030

    miguel
    Participant

    [QUOTE=tbird]I just got back from Receita Federal.

    I went to ask what date I should use for the beginning of my residency in my IRPF 2013. This will be my first ever IRPF in Brazil.
    I should say here that I have not yet filed my IRPF 2013 and I dont know what the program looks like.
    I was told that I should use the date when my permanency was “efetivado.” There is a doubt as to whether it should be the date when my permanency was published or the date when registered at Policia Federal. They suggest that I use the date of my DOU publication. I should NOT use the date when I applied for the permanent visa and received the protocolo.

    [/QUOTE]
    Right, refer to my previous post on a related thread (to which Willi provided a link 5 posts above, and further linked to directly below) for more color.
    miguel2014-04-23 14:20:39

  • #266031

    miguel
    Participant

    [QUOTE=WilliButz]@tbird:

    as discussed here: YE2012 empty, all information in the text field. I put account info, foreign currecy, reais, etc. and Miguels ” ‘O contribuinte adquiriu a condiìßao de residente fiscal no Brasil em xx/xx/xxxx’;”
    Then you should be safe, too.

    [/QUOTE]
    Not exactly. (BTW, when is that beer meet-up? Suggest we change the venue though.) See the full text of my related post, especially the part now highlighted for emphasis:
    [QUOTE=miguel]
    [QUOTE=WilliButz][QUOTE=miguel]
    Tax practitioners have a work around. On the Lista de Bens make an entry whose description is similar to the following. ‘O contribuinte adquiriu a condiìßao de residente fiscal no Brasil em xx/xx/xxxx’; assign it codigo 99 and list 0,00 and 0,00 as the respective values.[/QUOTE]

    Miguel, just to understand you: twice 0,00 just to not to catch the systems attention because the good did not increase?
    Or if he get permanent during the year… leave end 2012 empty, put end 2013 the real value and put the entry date value and your “explanaition” in the comment field?
    Sure this would catch attention due to the increase… but if everything is written there…
    Thanks
    Willi

    [/QUOTE]
    Not sure this answers your question, but it’s the only way on your initial return to let the RF know the actual date of your tax residency. The program won’t allow you to modify dates in the columns of your asset lists. For this return it’s the YE 2012 tax default date that would require the work-around, and the zero’s (for this entry only) are indicative of its explanatory nature. For all your other entries you would place the actual value of all your declared bens as of the date of your tax residency in that first column. The second column would remain unchanged at YE 2013.
    [/QUOTE]
    miguel2014-04-23 14:28:54

  • #266034

    kenalag
    Member

    @miguel:

    ahhhhhhhhhhhhhhhhhhhhh! i was reading to fast :-(
    Only the first entry YE 2012 filled with zeros.
    Rest of that column: YE2012 = entry date in 2013.
    And a lot of info each descirption text field :-)
    Obrigado!
    Willi
    PS:
    About the beer… we will see ;-)

    WilliButz2014-04-23 14:56:21

  • #266036

    Anonymous

    [QUOTE=tbird]what if someone on their first tax return declared the existence of foreign bank accounts with a balance HIGHER than the actual balance. Say, you have 10,000 euros in an account but you declare that you have 100,000 euros. Why would a person not declare a higher amount? I can see where it could become handy in the future (ex. you are a stellar English teacher and make 10,000 reais per months under the table. You cannot otherwise explain where you got the funds to purchase your car or make downpayment on a home). As far as I know, RF doesnt ask to see the actual account statements, at least not in principle. So why not declare money that you dont have?

    Of course this is all hypothetical. Smile

    [/QUOTE]
    Great minds think alike. I’m interesting in thoughts on this scenario, too.
    Hypothetically, of course… (“asking for a friend of a friend who is seeking source material for a fiction novel he may or may not be writing”).

  • #266043

    Luca
    Member

    [QUOTE=picolino]
    (“asking for a friend of a friend who is seeking source material for a fiction novel he may or may not be writing”).
    [/QUOTE]

    I think we may be talking about the same person! Is he a one-legged Finnish guy who lives in Bahia?
  • #266045

    [QUOTE=tbird]

    Now, let us speculate for a moment shall we. Declaring false information is illegal and none of us would do that. But but…
    what if somone on their first tax return declared the existence of foreign bank accounts with a balance HIGHER than the actual balance. Say, you have 10,000 euros in an account but you declare that you have 100,000 euros. Why would a person not declare a higher amount? I can see where it could become handy in the future (ex. you are a stellar English teacher and make 10,000 reais per months under the table. You cannot otherwise explain where you got the funds to purchase your car or make downpayment on a home). As far as I know, RF doesnt ask to see the actual account statements, at least not in principle. So why not declare money that you dont have?[/QUOTE]
    I have an accountant do my IRPF, and for this subject, she always wants to see actual statements of any non-Brasil accounts, which reflect the balance as of 31/12 (I access and print them on-line). AFIK, she doesn’t supply the RF with copies of those statements, so I suppose one could stretch ‘the truth’ as to what the real balance is, if doing the return yourself. But should you ever be asked to provide documentation, well then, fodaâ‚Ǩ¬¶.
    (I think only those who are upper echelon members of the PT can lie about their finances with impunity) Angry
  • #266051

    miguel
    Participant

    [QUOTE=tbird]

    Then in the end they said that “se cair na malha fina ì© sì≥ vir aqui explicar, não se preocupa.” LOL

    [/QUOTE]
    Gotta love it. Right, that minor matter you were initially called in for is so easily resolved. But when the agent is not in a great frame of mind as the mistress is not putting out, his intake of fiber is just not producing his desired result, or he lost the office pool bet on futebol, he might just decide to look for ‘something else.’ Wink
    miguel2014-04-24 00:08:23

  • #266053

    miguel
    Participant

    Interesting discussion. Usually expats here focus exclusively on declaring the absolute minimum – often less- and end up paying that much more. I would just add that for all of the above it’s just common sense to declare just about everything on one’s initial return. As for declaring more, that is AYOR and GF’s and every other seasoned accountant asks for those print-outs, for very good reason. If you’re ever called into the malha for a routine reason, anything is fair game (see my jibe above). Also, when transferring $ into the country, not only will your local bank (as agent for central bank) ask for your tax return where you declared that fat foreign account (and ask you to point that one out), they’ll want to see those screen shots of your actual bank balances, if updated, showing the actual Fund Transfer here. I guess one could try & play games with transferring $ from other declared accounts, but when you need to bring in additional $ from those accounts and account in turn for those balances things can start to get a little complicated.
    miguel2014-04-24 00:18:54

  • #266060

    Luca
    Member

    Helpful discussion here. One thing is clear: the first IRPF is veryimportant. And our one-legged Finnish friend has only a couple of days to decide on what to do.

    Oh, he also mentioned that he has a couple of hundred of Petrobrì°s ADR shares with a US brokerage firm. He said that he wasn’t planning on declaring them. Not sure if this is because he is embarrassed (bought in 2008) or if it is because he just doesn’t know how to do it. Wacko

    tbird2014-04-24 07:02:00

  • #266070

    kenalag
    Member
    @pico/miguel:
    Funny how much they trust screenshots/PDFs etc. In these photoshop-days everything that is not original or certified copy is not trustworthy…

    @tibird:

    Did “he” just keep them in a depot some where abroad? Not sell/buy?

    I have funds abroad, too. It is easy to put in the bens list, too. Select the corresponding code (i guess 31) and country.
    What i put in the description field:
    depot number, bank adress, Fund name, ISIN
    XX/XX/2013 (your start date): 100 Unidades – Valor: XX EUR = XX B$
    31/12/2013 (year end): 100 Unidades – Valor: YY EUR = XX B$

    O CONTRIBUINTE ADQUIRIU A CONDICAO DE RESIDENTE FISCAL NO BRASIL EM XX/XX/2013

    This makes also visible where a change in the B$-value is coming from: change of amount, change of original value, change of exchange rate.

    Somewhere i read that this has to be done for each different fund/share. I did not put any date of buying… Guess they are asking for this in the capital gains program:-/

    Cheers

    Willi

    WilliButz2014-04-24 09:03:30

  • #266073

    Luca
    Member

    @willibutz he mumbled something about not knowing how to declare the dividends.

    He is really embarassed with how poor an investment decision he made. At the time, he was convinced that Lula and Co. would not let Petrobras depreciate by 2/3 because millions of Brazilian workers had used their FGTS to invest in Petrobras and Vale. Clown
  • #266075

    kenalag
    Member

    [QUOTE=tbird]@WilliButz he mumbled something about not knowing how to declare the dividends.

    He is really embarassed with how poor an investment decision he made. At the time, he was convinced that Lula and Co. would not let Petrobras depreciate by 2/3 because millions of Brazilian workers had used their FGTS to invest in Petrobras and Vale. Clown

    [/QUOTE]

    Local company in a foreign depot, right? So it is foreign dividends = foreign income.
    I would enter it in the carne-leao in the relevant month and see if it wants me to pay taxes. Guess we are a little late for that now.
    When has it been paid? Is it a lot (more than 1700 B$)?
  • #266105

    Luca
    Member

    [QUOTE=miguel] As for declaring more, that is AYOR and GF’s and every other seasoned accountant asks for those print-outs, for very good reason.
    [/QUOTE]

    Miguel, what about cold cash stashed away in the mattress. My friend has 1000 euros in cash that he is going to declare. But why not just declare that he has 10,000 euros? Is there any conceivable scenario in which Receita would ever verify this?

    tbird2014-04-25 07:26:05

  • #266111

    kenalag
    Member

    Haha, well, if RFB wants to see the cash, he can say that he invested the cash in beer… guess RFB will not ask for the notas LOL

  • #266112

    Luca
    Member

    [QUOTE=WilliButz]Haha, well, if RFB wants to see the cash, he can say that he invested the cash in beer… guess RFB will not ask for the notas LOL[/QUOTE]

    Exactly. He had 10000 on 31/12/2013 which he may or may not still have depending on who is asking. Wink
  • #266113

    kenalag
    Member

    For example: how to proof cash under the FOREIGN bed, e.g. at his mum’s place?

  • #266137

    miguel
    Participant

    [QUOTE=WilliButz]

    @pico/miguel:
    Funny how much they trust screenshots/PDFs etc. In these photoshop-days everything that is not original or certified copy is not trustworthy…

    @tibird:

    Did “he” just keep them in a depot some where abroad? Not sell/buy?

    I have funds abroad, too. It is easy to put in the bens list, too. Select the corresponding code (i guess 31) and country.
    What i put in the description field:
    depot number, bank adress, Fund name, ISIN
    XX/XX/2013 (your start date): 100 Unidades – Valor: XX EUR = XX B$
    31/12/2013 (year end): 100 Unidades – Valor: YY EUR = XX B$

    O CONTRIBUINTE ADQUIRIU A CONDICAO DE RESIDENTE FISCAL NO BRASIL EM XX/XX/2013

    This makes also visible where a change in the B$-value is coming from: change of amount, change of original value, change of exchange rate.

    Somewhere i read that this has to be done for each different fund/share. I did not put any date of buying… Guess they are asking for this in the capital gains program:-/

    Cheers

    Willi

    [/QUOTE]
    As previously stated the ” O contribuinte adquiriu ….” is a placeholder, the convention is to use a single entry, with the correct asset code (99), with zero’ed out values, which, according to the professional accountants I consulted, is what the RF’s programs recognize. If you choose to repeat it in the text field for every foreign asset, although a case of potential overkill that is your decision but you may want to consider adhering to the convention listed above.

  • #266138

    miguel
    Participant

    [QUOTE=tbird]@WilliButz he mumbled something about not knowing how to declare the dividends.

    He is really embarassed with how poor an investment decision he made. At the time, he was convinced that Lula and Co. would not let Petrobras depreciate by 2/3 because millions of Brazilian workers had used their FGTS to invest in Petrobras and Vale. Clown

    [/QUOTE]
    Your Finnish friend should be downright ashamed. It was truly a lousy investment decision. Although an investment in one of Eike’s companies may arguably have been worse, depending on the timing of the purchases & redemptions.

  • #266139

    miguel
    Participant

    [QUOTE=WilliButz][QUOTE=tbird]@WilliButz he mumbled something about not knowing how to declare the dividends.

    He is really embarassed with how poor an investment decision he made. At the time, he was convinced that Lula and Co. would not let Petrobras depreciate by 2/3 because millions of Brazilian workers had used their FGTS to invest in Petrobras and Vale. Clown

    [/QUOTE]

    Local company in a foreign depot, right? So it is foreign dividends = foreign income.
    I would enter it in the carne-leao in the relevant month and see if it wants me to pay taxes. Guess we are a little late for that now.
    When has it been paid? Is it a lot (more than 1700 B$)?

    [/QUOTE]
    Right, foreign dividends, unlike local dividends are not locally tax exempt for residents.
    It is doubtful though, unless of course you had other foreign income on the carne leao that pushed you outside the exemptions, that the shrinking and trivial dividend yield on that particular investment would have ended up locally taxed. Bear in mind if they were taxed abroad, you could have claimed the foreign tax credit locally.

  • #266140

    miguel
    Participant

    [QUOTE=tbird]

    Oh, he also mentioned that he has a couple of hundred of Petrobrì°s ADR shares with a US brokerage firm. He said that he wasn’t planning on declaring them. Not sure if this is because he is embarrassed (bought in 2008) or if it is because he just doesn’t know how to do it. Wacko

    [/QUOTE]
    Your one-legged friend can also keep in mind that if he declares this investment on his first resident tax return, that in the very unlikely event that he ever recognizes a capital gain when he sells those shares, that it would be locally tax-exempt.

  • #266141

    miguel
    Participant

    [QUOTE=tbird]

    Oh, he also mentioned that he has a couple of hundred of Petrobrì°s ADR shares with a US brokerage firm. He said that he wasn’t planning on declaring them. Not sure if this is because he is embarrassed (bought in 2008) or if it is because he just doesn’t know how to do it. Wacko

    [/QUOTE]
    Should your friend decide to declare, tell him that, since his initial year (i.e. year of tax residence – the first column) that he should not update, in future years (including 12/31/2013 – the second column) either the share price, or the exchange rate. The initial value should be held constant in future years, as per RF regs (unless and until he sells). Note that this treatment is different from declaring, for example, bank balances (for which the balances, as well as the YE exchange rates are updated).

  • #266142

    miguel
    Participant

    [QUOTE=WilliButz]

    @pico/miguel:
    Funny how much they trust screenshots/PDFs etc. In these photoshop-days everything that is not original or certified copy is not trustworthy…

    @tibird:

    Did “he” just keep them in a depot some where abroad? Not sell/buy?

    I have funds abroad, too. It is easy to put in the bens list, too. Select the corresponding code (i guess 31) and country.
    What i put in the description field:
    depot number, bank adress, Fund name, ISIN
    XX/XX/2013 (your start date): 100 Unidades – Valor: XX EUR = XX B$
    31/12/2013 (year end): 100 Unidades – Valor: YY EUR = XX B$

    O CONTRIBUINTE ADQUIRIU A CONDICAO DE RESIDENTE FISCAL NO BRASIL EM XX/XX/2013

    This makes also visible where a change in the B$-value is coming from: change of amount, change of original value, change of exchange rate.

    Somewhere i read that this has to be done for each different fund/share. I did not put any date of buying… Guess they are asking for this in the capital gains program:-/

    Cheers

    Willi

    [/QUOTE]
    See my note above, which also applies to foreign mutual funds. Do not update your asset value, after the initial column, and in future columns/years (which includes 12/31/2013), for changes in the exchange rate, or NAV (net asset value – share price). If you declare mutual funds you held prior to permanencia, any eventual cap gains (see above) will be locally tax- exempt, although reportable when you sell. Be sure to specify the acquisition dates especially from the date you acquired tax residency, which would be added as of the exchange rate and NAV of that date of purchase to the constant, previously declared values.

  • #266143

    miguel
    Participant

    [QUOTE=tbird]what about cold cash stashed away in the mattress. My friend has 1000 euros in cash that he is going to declare. But why not just declare that he has 10,000 euros? Is there any conceivable scenario in which Receita would ever verify this?[/QUOTE]
    If your friend is going down this route, then why does he stop at 10,000 euros……
    Your friend should bear in mind that, as you posted separately on the MEI, something else might not jibe and he could be flagged for an audit. While in the malha, the otherwise very friendly RF auditor would probably open up the entire return. Can your friend then prove that those 1,000,000 euros he finally decided to declare as cash were not money laundered, does he have any documentation at all as to the origin of those funds.
    miguel2014-04-26 17:45:36

  • #266150

    Luca
    Member

    [QUOTE=miguel][QUOTE=tbird]what about cold cash stashed away in the mattress. My friend has 1000 euros in cash that he is going to declare. But why not just declare that he has 10,000 euros? Is there any conceivable scenario in which Receita would ever verify this?[/QUOTE]
    If your friend is going down this route, then why does he stop at 10,000 euros……
    Your friend should bear in mind that, as you posted separately on the MEI, something else might not jibe and he could be flagged for an audit. While in the malha, the otherwise very friendly RF auditor would probably open up the entire return. Can your friend then prove that those 1,000,000 euros he finally decided to declare as cash were not money laundered, does he have any documentation at all as to the origin of those funds.
    [/QUOTE]

    1,000,000 euros is probably a stretch. LOL.
    But yeah, he should be able to explain the origin of those funds. But he has his Finnish IRPF declaration from prior years.
    Smile
  • #266153

    kenalag
    Member

    [QUOTE=miguel]
    See my note above, which also applies to foreign mutual funds. Do not update your asset value, after the initial column, and in future columns/years (which includes 12/31/2013), for changes in the exchange rate, or NAV (net asset value – share price). If you declare mutual funds you held prior to permanencia, any eventual cap gains (see above) will be locally tax- exempt, although reportable when you sell. Be sure to specify the acquisition dates especially from the date you acquired tax residency, which would be added as of the exchange rate and NAV of that date of purchase to the constant, previously declared values.
    [/QUOTE]

    Thanks, got it. Have all documentation.
    I understood you right that i just need these aquisition info after becoming permanent for the case of selling funds.
    Regarding not changing the value in the bens-list:
    I got the idea of never changing the “start value” when becoming permanent. But i bought some foreign funds (with foreign income)after becoming permanent, so the number of units changes between becoming permanent and YE 2013.
    As there are no more founds bought in 2014 and later, i would always copy the YE2013 value, following your advice.
    Willi
  • #266156

    miguel
    Participant

    [QUOTE=tbird][QUOTE=miguel][QUOTE=tbird]what about cold cash stashed away in the mattress. My friend has 1000 euros in cash that he is going to declare. But why not just declare that he has 10,000 euros? Is there any conceivable scenario in which Receita would ever verify this?[/QUOTE]
    If your friend is going down this route, then why does he stop at 10,000 euros……
    Your friend should bear in mind that, as you posted separately on the MEI, something else might not jibe and he could be flagged for an audit. While in the malha, the otherwise very friendly RF auditor would probably open up the entire return. Can your friend then prove that those 1,000,000 euros he finally decided to declare as cash were not money laundered, does he have any documentation at all as to the origin of those funds.
    [/QUOTE]

    1,000,000 euros is probably a stretch. LOL.
    But yeah, he should be able to explain the origin of those funds. But he has his Finnish IRPF declaration from prior years.
    Smile

    [/QUOTE]
    Those Finnish IRPF’s will definitely help. Tell him though to be prepared to spend a good part of those euros for official translations, authentications, stamps, you know, the Custo Brasil.

  • #266158

    miguel
    Participant

    [QUOTE=WilliButz][QUOTE=miguel]
    See my note above, which also applies to foreign mutual funds. Do not update your asset value, after the initial column, and in future columns/years (which includes 12/31/2013), for changes in the exchange rate, or NAV (net asset value – share price). If you declare mutual funds you held prior to permanencia, any eventual cap gains (see above) will be locally tax- exempt, although reportable when you sell. Be sure to specify the acquisition dates especially from the date you acquired tax residency, which would be added as of the exchange rate and NAV of that date of purchase to the constant, previously declared values.
    [/QUOTE]

    Thanks, got it. Have all documentation.
    I understood you right that i just need these aquisition info after becoming permanent for the case of selling funds.
    [/QUOTE]
    Right
    [QUOTE=WilliButz]
    Regarding not changing the value in the bens-list:
    I got the idea of never changing the “start value” when becoming permanent. But i bought some foreign funds (with foreign income)after becoming permanent, so the number of units changes between becoming permanent and YE 2013.
    As there are no more founds bought in 2014 and later, i would always copy the YE2013 value, following your advice.
    Willi

    [/QUOTE]
    Right, acquisitions after permanencia (including YE 2013) would be reflected as adjustments to your otherwise constant tax basis on your lista de bens for eventual cap gains calculations. Remember though that your ‘start-date’ acquisitions will be free from eventual cap gains taxes,the gain will be calculated and listed ‘isento.’ Other gains resulting from acquisitions after your start date are taxable. If no more acquisitions are made after YE 2013, then you would continue using that value in future years.
    miguel2014-04-26 20:47:10

  • #266186

    LizH
    Member

    Question for the experts: 2012 was my first tax return in Brazil, and my contador “said” there was no need to declare my foreign cash and other assets… Just declared foreign salary for which I am paying carne leao.
    This time for 2013 declaration, my new contador is telling me I must declare them all which I understand is the right way to do it ( the other contador couldn’t last long, could he?) .
    Am I getting in potential problems for not declaring something that it was never meant to be taxed in Brazil anyway?
    cheers

  • #266194

    kenalag
    Member

    [QUOTE=miguel]

    [QUOTE=WilliButz]
    Regarding not changing the value in the bens-list:
    I got the idea of never changing the “start value” when becoming permanent. But i bought some foreign funds (with foreign income)after becoming permanent, so the number of units changes between becoming permanent and YE 2013.
    As there are no more founds bought in 2014 and later, i would always copy the YE2013 value, following your advice.
    [/QUOTE]

    Right, acquisitions after permanencia (including YE 2013) would be reflected as adjustments to your otherwise constant tax basis on your lista de bens for eventual cap gains calculations. Remember though that your ‘start-date’ acquisitions will be free from eventual cap gains taxes,the gain will be calculated and listed ‘isento.’ Other gains resulting from acquisitions after your start date are taxable. If no more acquisitions are made after YE 2013, then you would continue using that value in future years.
    [/QUOTE]

    Ok. What is the deeper idea behind keeping the initial value of the funds, without adjusting the value and the exchange rate?
    As far as i have learnt in accounting and balance sheets, it should be always be adjusted to the current value….
    Where can i find more information about it?
    If i keep just the starting value for existing found without any aquisition in 2013, i would change my description field to this:
    13/07/2013: 9,608 UNIDADES – VALOR: 887,85 EUR = 2625,37 R$;
    31/12/2013: 9,608 UNIDADES
    It indicates that there has been no aquisition after becoming resident.
    For founds with aquisitions, units and value are adjusted at YE2103, using the value andexchange rate of then.
    Cheers
    Willi
  • #266196

    Luca
    Member

    I believe that the deeper idea behind keeping the initial value of assets is that Receita wants to be able to charge you capital gains tax on a larger amount when and if you sell the assets.

  • #266199

    miguel
    Participant

    [QUOTE=tbird]I believe that the deeper idea behind keeping the initial value of assets is that Receita wants to be able to charge you capital gains tax on a larger amount when and if you sell the assets.[/QUOTE]
    Precisely, capital gains (if any) based on both currency and price fluctuations are recognized at sale date, in the meantime the tax basis as reflected on your bens remains constant in local currency.
    Bearing in mind that the cap gains rate here, as in most countries, may be significantly lower than those for ordinary income (wages, interest, rental income).

  • #266200

    miguel
    Participant

    [QUOTE=WilliButz][QUOTE=miguel]

    For founds with aquisitions, units and value are adjusted at YE2103, using the value andexchange rate of then.

    [/QUOTE]
    No, as mentioned previously you use the exchange rate on the dates of acquisition, just as you will eventually use the exchange rate on the dates of redemption.
    miguel2014-04-28 09:12:39

  • #27162

    Luca
    Member

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