Changes in US tax rules affect Brazil
Luis Guilherme B. Gonçalves
21 de February de 2022
O Sócio Luis Guilherme Gonçalves colaborou com a matéria divulgada
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Tax Compliance Department assist our clients in a variety of issues so they can assure full compliance with the applicable tax filing requirements in each jurisdiction.
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BT7 Partners’ tax compliance team assist our clients in forming entities in several jurisdictions such as: United States of America and Canada; Europe and others.
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Tax Consulting Department assist our clients in a variety of ways analyzing the applicable tax aspects regarding their projects.
ABOUT US
BT7 Partners is a company that started from the daily experience with Brazilian and Latin American clients interested in immigrating, doing business or investing in the USA.
Thousands of people with one dream in common: new opportunities on the personal, family and professional levels. To build or to start creating a new life.
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Entity Formation
Tax compliance team assist our clients in forming entities in several jurisdictions.
Business Advisory
Business Advisory Department assist our clients to define the most suitable and efficient strategies.
International Tax Consulting
Tax Consulting Department assist our clients in a variety of ways analyzing the applicable tax aspects regarding their projects.
Tax Compliance & Bookkeeping
Tax Compliance Department assist our clients in a variety of issues so they can assure full compliance with the applicable tax.
Our Team
Alexandre Rovai
Partner – Corporate Finance
Leandro Nogueira
Partner – Global Tax
Luis Guilherme Gonçalves
Partner – Global Tax
PUBLICATIONS AND EVENTS
Do you want to succeed in the United States? Turn your dream into a project
Luis Guilherme B. Gonçalves
6 de August de 2021
By Antonio Britto, 67 years old, journalist, with a long
Sustainable Investment Webinar
Luis Guilherme B. Gonçalves
29 de July de 2021
The event was held in partnership with Alliance Bernstein (one
CASO AB LLC & BD Holdings LLC
Luis Guilherme B. Gonçalves
13 de July de 2021
Caracterização de Estabelecimentos Permanentes de empresas norte-americanas na África do
CASO KAISER
Luis Guilherme B. Gonçalves
13 de July de 2021
Artigo Originalmente Publicado na Obra ‘Tributação Internacional: Análise de Casos
Customs Mutual Assistance Agreement (CMAA) between U.S. and Brazil
Luis Guilherme B. Gonçalves
29 de April de 2021
In June 20th, 2002, U.S. and Brazil signed a CMAA
FAQ
In the United States, in addition to the Federal Government, some states also collect Individual Income Tax. However, Florida, Nevada, Texas and Alaska, among others, do not collect this tax.
The states of California, New York and Hawaii.
As a rule of thumb, someone with an F visa, as well as someone with a J or M visa, is exempt from filing tax returns in the US for up to 5 years, when it comes to revenue from foreign sources. However, some precautions must be taken. For example, in regard to complying with the respective American immigration rules and submitting an annual form to the IRS in order to report the days of physical presence and the academic institution information. Another precaution is the one related to adopting possible steps aiming to acquire the permanent residency authorization, which can potentially “cancel” the aforementioned exemption benefit. It must be stressed that said exemption benefit may no longer apply if the person has certain types of revenue. For this reason, it is important to pay close attention to the particularities of each case, in order to adopt the best strategies.
For non-US citizens, tax residency in the country usually happens in the following scenarios: when receiving the Green Card, or when remaining in the country for over 182 days, which is called “substantial presence.” The way the 182 days are calculated may differ from other countries. In the United States, they take into account the days present not only in the current year, but also the two previous years.
Each financial year has a different weight for the purposes of the calculation (the current year of the test considers 100% of the days; the previous year considers 1/3 of those days; the year before that considers 1/6 of the days). If the total sum exceeds 182 days, the person becomes a tax resident for the current year. The effects of characterizing this residency as such may be retroactive to the first day of presence in that particular year.
As a rule of thumb, yes. However, it is necessary to be aware of compliance with your visa requirements concerning the connection to the educational institution. In addition, you must deliver the respective annual form to the North American fiscal authority, the IRS, as mentioned in question 3 above. It is important to highlight that some revenue may eventually not be covered by exemption, thus requiring a more thorough analysis of the concrete case.
When working for an American employer, it is necessary to take the Substantial Presence Test mentioned in question 4 in order to determine your tax resident status in the country. However, if the person already has a Green Card, they automatically become a tax resident.
If you have not formalized your Definitive Exit from the country, by delivering the respective Statement to the Federal Revenue, you are required to file income tax returns in Brazil, even if you are also considered a tax resident in the United States.
First of all, it is important to clarify that, with formalizing the Definitive Exit, your Tax ID (CPF) number will not be automatically cancelled. In addition, it will not prevent you from having real estate properties and corporate participation in Brazilian companies.
However, there will be other consequences, such as the impossibility of adopting the SIMPLES Nacional regime through the companies in which you are a partner. Another example is the impossibility of continue to manage these companies, as well as not being able to use the Reduction Factor for the purposes of Capital Gains calculations.
The Statement of Definitive Exit may also restrict the financial investment portfolio in Brazil, almost limiting said portfolio to investing in some funds, CDBs and Private Pension Funds.
In other words: you must be cautious, you must know all the consequences and plan this step very well ahead of time.
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