Taxation
Brazil-US Taxation for Brazilians in the US
Brazil-US cross-border taxation is among the most complex and most ignored areas. Obligations exist in BOTH countries simultaneously, and omissions result in fines up to 50% of the undeclared account balance. We work integrated with US CPAs and Brazilian tax accountants specialized in cross-border.
US tax obligations (if you're a US Person)
| Obligation | Form | Penalty for omission |
|---|---|---|
| US income tax return | Form 1040 | Variable |
| FBAR (foreign accounts > $10K) | FinCEN 114 | Up to $10,000/yr (willful: 50% of balance) |
| FATCA (foreign assets > $50K) | Form 8938 | $10,000–50,000 |
| Foreign company participation (>10%) | Form 5471 | $10,000+ |
| Passive Foreign Investment Company | Form 8621 | Heavy |
| Transfer to foreign company | Form 926 | 10% of value |
US Person = US citizen, green-card holder, or someone who passed the Substantial Presence Test.
Substantial Presence Test — watch out
If you spent 183 days in the US over the last 3 years (weighted formula: current-year days + 1/3 prior year + 1/6 two-years-ago), you're a US tax resident for IRS purposes — even without a green card. This activates all the obligations above.
Brazilian tax obligations
- If living in Brazil: Foreign Assets Declaration (DIRPF code 71)
- CBE (SISBACEN): mandatory if foreign assets total > $1M (annual in April) or > $100M (quarterly)
- GCAP: capital gain on sale of foreign asset, in the sale month
- If living in US with GC/citizenship: should have filed Communicação de Saída Definitiva; if not, you're still a Brazilian tax resident and must declare
Brazil and US do NOT have a ratified tax treaty
The treaty was negotiated but never ratified by the US Senate. The available mechanism is the Foreign Tax Credit (credit tax paid in Brazil against US tax owed, or vice versa) — but with limitations, and it doesn't eliminate all double-taxation situations.
Frequently asked questions
Do I need to declare my Brazilian account if I have a green card?
Yes. As a US person, if aggregate foreign account balance exceeded $10,000 at any point in the year, you must file FBAR (FinCEN 114).
When is CBE mandatory?
Annual CBE if foreign asset total ≥ $1M on 12/31. Quarterly if ≥ $100M. Omission penalty: up to R$ 250,000.
Do Brazil and the US have a tax treaty?
No. It was negotiated but never ratified. You use the Foreign Tax Credit to avoid double taxation in some situations.
Do I need to declare Brazilian rental income to the IRS?
Yes, if you're a US person. Global income is US-taxable. Taxes paid in Brazil may be credited via Foreign Tax Credit.
What's a PFIC and why worry?
Passive Foreign Investment Company — many Brazilian funds (FII, stock funds, etc.) are classified as PFIC and face highly unfavorable US taxation. Case-by-case analysis is essential.
Ready to Take the Next Step?
Schedule a consultation today. We will listen, assess your situation, and give you a clear path forward — in the language you are most comfortable with.