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  • #273967

    tdlankford
    Member

    Hi! I am filing taxes for first time in Brasil. I have very little Brasilian income (just a few reais in interest) but do have capital gains and dividends from investments in USA. While I understand that I get to deduct taxes that I pay in USA from taxes that I owe in Brasil for my USA earned income, I was wondering if the taxes here are much heavier. I am already pissed at the idea of having to pay who knows how much to the very accountants woh know how to interpret the US taxes for my return.

  • #273968

    kenalag
    Member

    Download the program. Read the help. A mountain of information.
    Adjust if you van.WilliButz2015-03-10 19:20:56

  • #273975

    GGTrek
    Participant

    [QUOTE=Mona]Hi! I am filing taxes for first time in Brasil. I have very little Brasilian income (just a few reais in interest) but do have capital gains and dividends from investments in USA. While I understand that I get to deduct taxes that I pay in USA from taxes that I owe in Brasil for my USA earned income, I was wondering if the taxes here are much heavier. I am already pissed at the idea of having to pay who knows how much to the very accountants woh know how to interpret the US taxes for my return. [/QUOTE]

    It really depends on the amount on income you have in the US. The maximum rate you will be hit in Brazil is 27.5% on the income – federal tax (only) that you paid in the US, non federal taxes cannot be compensated (like state or municipal taxes).
    There is no double taxation agreement between Brazil and US, but Receita Federal will accept the compensation above based on reciprocity (the IRS does the same from my understanding).
    Having said this, if in the future you are not planning to move this money to Brazil, I would avoid declaring, especially dividends that are subject to Carne-Leão (a monthly tax calculation and payment with very strict dates and penalties for payments) which is a huge headache for little dividends money (Receita is very hungry for money and cannot wait end of year to receive it, but they make you wait up to 18 months to give it back to you). Foreign currency capital gains are not taxable until remitted to Brazil.
    Receita Federal has not got any tool to know what you have in the US (especially due to the lack of tax agreement)
  • #273977

    Steven
    Participant

    I believe that there are many gringos living in Brazil who survive on ATM withdrawals using their U.S. debit cards. I suspect that many of them don’t bother Receita Federal with the minutiae of where the money originated.

    The reciprocity agreement cited by GG will only guarantee that you pay the higher rate of the two countries. Doing this, if not needed, is like looking for the largest hammer possible to hit yourself in the head.
  • #273986

    jeb2886
    Member

    [QUOTE=GGTrek] Foreign currency capital gains are not taxable until remitted to Brazil.

    Receita Federal has not got any tool to know what you have in the US (especially due to the lack of tax agreement)

    [/QUOTE]

    Is this legally how it’s done, or just how people do it? All the accountants I have talked to said not taxable until it comes into Brazil as well.
    But they added one additional piece of information — If I used this capital gains to purchase an investment here, I wouldn’t be paying taxes on it either, and that investment could be a house. I would only pay taxes on the gains of the house, not the money brought into the country….
  • #273993

    Wellington
    Member

    All the accountants you have spoken to must be incompetent. Brazil taxes the worldwide income and gains of its permanent residents, regardless of whether those incomes and gains are actually brought over to Brazil. According to the law you must declare your overseas CGT and pay tax (less any tax credit given by Brazil in the event that you have been taxed on the same gain in the source country). What is a matter of choice for you is whether you wish to declare your overseas income. I am told that some don’t and pull it out of Brazilian ATMs using their foreign bank card, under the radar of the Brazilian tax authorities. You must decide for yourself if you want to do that and risk the consequences. If you use your overseas card to make purchases in Brazil where you CPF is required, your CPF will be tracked and linked to those payments, and they may wonder about the source of the money.

    When you first became a permanent resident you should have made a declaration of your worldwide assets. This way, it will be seen as patrimonio and not taxed as a new gain when you bring it into Brazil. Did you do that? If you did not, you are in a pickle!

    man of leisure2015-03-11 17:42:29

  • #273999

    jeb2886
    Member

    I’m not trying to risk anything, I’m trying to find someone who knows what the !@#$ they’re doing!

    The other thing they mentioned, which I’m really doubting, is to get the reciprocity tax breaks, I must bring it into the country immediately, otherwise it’s counted as income that hasn’t been taxed later on.
  • #274000

    GGTrek
    Participant

    As usual in this forum I see a lot of people talking without references to actual official data.
    On the compensation of tax paid outside:
    http://www.receita.fazenda.gov.br/PessoaFisica/IRPF/2013/perguntao/perguntas/pergunta-126.htm
    On the US federal tax compensation:
    http://www.receita.fazenda.gov.br/PessoaFisica/IRPF/2013/perguntao/perguntas/pergunta-128.htm
    Foreign Capital gains exclusions list (see points 12 to 15)
    http://www.receita.fazenda.gov.br/pessoafisica/irpf/2014/perguntao/perguntas/pergunta-534.html
    Some CG is included, but many CG are excluded. Most importantly the FX gain is excluded. Or if you were a non-resident when you purchased the asset, the whole CG is excluded.
    With respect to declaring all your worldwide assets to the Brazilian Tax authorities, ask yourself: do I need to transfer it to Brazil in the future?
    If the answer is yes, then declare it in Bens e Direitos section of the Tax Return.
    If the answer is no, then ask yourself: do I trust the current Brazilian government not to confiscate or heavily tax all my worldwide assets during a crisis? Look at the not so distant Brazil past for examples and you shall get your answer.
    I need to protect the assets that can sustain my family if/when emergency comes and as an hedge against Brazil risk. The thieving Brazil government definitely is the last institution I would like to involve in an emergency. I pay enough tax on my Brazil income (receiving jack ….. in return, since I have to pay for education of my children and the health-plan for my family) and I pay tax outside Brazil on my non-Brazil income, my conscience is perfectly fine and definitely cleaner than the thieves sitting in Brasilia. I hate Receita Federal and Policia Federal (actually anything federal is absolute ….) and the vast majority of their super paid parassitic agents might burn in hell as far as I am concerned.

  • #274009

    jeb2886
    Member

    Thanks, I’m going to be using these with the next accountant I speak to. Most of my income falls into the rental category (assets under housing, but far exceed the allowed exceptions here, although all were purchased prior to arriving, so that works out.

    Definitely something to think about, if the government gets desperate, it’s hard to say what they will do. A one time wealth tax is completely within the realms of possibility. I know they have to tread lightly, because spooking investors, especially foreign investors will make them run for the doors and that will absolutely cause a mess.
    I suspect they will try and print their way out of this mess to some degree. It’s far easier to devalue everyones wealth through inflation than to try and impose a new tax.
    However, I do intend to bring down a large chunk of money should the country create problems. I suppose I could get personal loans, which would only show I held a massive amount of debt versus wealth. But something to think about!
  • #274093

    tdlankford
    Member

    Thanks for all replies. In my situation, I brought in a one time large amount of money last year and deposited in a bank for which I am paying taxes in Brasil (of the interest). The problem is that the bank made me show the balance of my bank account in USA before it allowed me to transfer the money into my brasilian account. So, the bank knows how much I have overseas and I am not sure who else . . . .

    I do not plan to bring more money in but I do plan to live here for at least 5 more years. My income is made of capital gains and dividends for which I pay all regular US federal taxes.

    When I applied for residency, I never had to declare my worldwide assets so I did not understand that part. Having said that, I am still not permanent resident (I am still in process) but I did spend more than 6 months last year.
  • #28310

    tdlankford
    Member

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