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20 October 2000
Brazilian companies and individuals often use offshore trusts to protect their wealth, as tax haven jurisdictions provide low rates of taxation for non-residents.
The remittance of funds abroad may be effected through an international transfer of Brazilian currency or through floating-rate markets. Currency is transferred when a Brazilian resident credits an account held by a non-resident financial institution. The institution purchases foreign currency in the floating-rate exchange market and delivers the corresponding amount of dollars abroad, according to the client's instructions. Such transfers require no prior authorization.
Brazilian banking laws do not prevent a Brazilian resident from having investments abroad, nor from making remittances for other purposes, provided that he (i) justifies the remittance and (ii) pays income tax on the profits of the offshore investment.
In the Central Bank's Brazilian Exchange Regime it is acknowledged that:
"There is nothing wrong in the usual up-to-date taxpayer citizen using his savings as he wishes, including the performance of remittances abroad. The agent may want to hold funds abroad to use them how and when he pleases. After all, they are his funds and he has already paid all taxes."
The international transfer of Brazilian currency must be supported by relevant documentation. Should the remittance be to a bank deposit in the name of the Brazilian company abroad, the bank account number and name of the corresponding bank are the only information required by the Central Bank.
The imposition of taxes may differ according to the parties involved and alternatives elected for the repatriation of capital. The taxes to be considered are:
The international transfer of money to offshore centres is subject to money laundering rules. Every transaction of R10,000 or more (approximately $5,000) must be recorded by the Central Registry if it involves:
Records must include the type, date and amount of the transaction, with the relevant individual taxpayer's national registration number. Records must be kept for at least five years after the transaction has been completed or the account has been closed.
The Central Bank of Brazil must be notified of all suspicious transactions by the end of the business day following the date of the transaction. Clients must not be advised that their transactions are being reported.
For further information on this topic please contact Nei Schilling Zelmanovits or Irenne Yamanaka at at Machado, Meyer, Sendacz e Opice by telephone (+55 113 150 7120) or by fax (+55 113 150 7071) or by e-mail (email@example.com or Iyamanaka@mmso.com.br).
The materials contained on this web site are for general information purposes only and are subject to the disclaimer.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
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