How to report taxes for your offshore investments if you live in Brazil

At Passfolio, we’ve partnered up with Douglas Gomes from Meu Contador to create a guide with key information about how to report taxes for your offshore investments if you live in Brazil.

You can access the guide for free here, but we'll highlight some of the most important information you need to know in this post. Remember this information should not be considered legal or tax advice - please consult your lawyer or tax professional regarding your specific situation. 

Taxable sources of income 

Dividends: If you're Brazilian, the dividends you receive in Brazil aren't taxed. However, dividends received outside Brazil aren't exempt from taxation. The dividend tax must be calculated monthly via Carnê Leão and paid through a DARF (Federal Revenue Collection Document) with the code 0190. 

Asset Appreciation: When you acquire an asset for $100 and sell it for $120, the money you make from that sale is considered capital gains (which is taxable).You should use the GCAP system to find out exactly how much tax you should pay in this case.

Interest: When you earn interest on an investment abroad, this interest has to be reported as capital gains. The tax you have to pay on the interest you got paid should be calculated using the GCAP system as well.  

General rules for capital gains

Exemption Limit: If you sold up to 35,000.00 BRL (thirty five thousand reais) of stock in a given month, you are exempt from taxation regardless of your profit. However, this does not apply to interest you may earn on your investments. 

Exchange Rate Variation: If the money you used to invest abroad was earned in Brazil, you must calculate the difference between the purchase and sale price of your stock taking into account the exchange rate variation between when you purchased and sold your assets. However, if the money used to acquire assets abroad was earned in the US, you do not need to take into account the exchange rate and will pay tax only on the gain you obtained in the sale of the asset.

Want to know more? Get the guide! 

We recommend that you consult the complete guide we put together in partnership with the Meu Contador team. It is important to invest abroad in compliance with fiscal laws, in order to avoid any inconvenience.

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