Tax | Tax Planning In Foreign Donations to Brazil

Anyone who transfers money, equity or assets in general as a donation from abroad to someone resident in Brazil must have attention to the State Donation Tax. This tax is levied by states, along with the Inheritance Tax (the Brazilian Estate tax) and has different rates from state to state. 

But because these two taxes have similar rates between them, the donation is a modality of tax planning with subjects in Brazil or companies domiciled in Brazil or abroad. 

The one who intends to make a tax planning must have attention in a recent trial that has just started in the Brazilian Supreme Court (STF). It is being discussed if the Donation/Inheritance Tax can be charged from a donation of a nonresident to a Brazilian company or subject. The first Associate Justice ruled that from now on the tax is exempt. 

If this ruling stands, the tax planning will be much more interesting for those who can constitute a company offshore, because these taxes cover virtually the hole Estate, which means operations of transmissions from cash and real estate to equity and credit rights.


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