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Donations and inheritances received abroad: how to tax and declare them? We are constantly dealing with clients who receive donations or inheritances from foreign countries.
[See the full article at Donations and inheritances received abroad: how to tax and declare them] -
Good afternoon,
I'm an American citizen, 65 years old, permanent resident in Brazil, in the state of RJ, since 1987. I don't have any social security here or there. I've never filed a tax return, as I've always earned less than the exemption. With the pandemic, I was left with practically no job/income. My relative, an American citizen living in the US, wants to send me a gift/donation of USD 30,000 to help. We're thinking of sending it to my wife's checking account, as I don't have my own.
Please, I would like some guidance on our options regarding taxes, fees and exchange rates.
Thank you very much in advance...-
Hello, Don!
The Supreme Court has concluded its ruling that when the donor is domiciled abroad, and not in Brazil, the state cannot charge ITCMD on the donation. This should last as long as there is no complementary law allowing this. In this respect, I would say that this point is positive. Exchange remittances on donations received from abroad are also subject to IOF.
Regarding the account issue, the best recommendation is usually to talk to the bank or broker's foreign exchange desk beforehand, to confirm what documentation they will ask for in order to feel comfortable intermediating the remittance. It is at this point that questions may arise from the point of view of Central Bank regulations. In principle, if you can prove that it is a donation, that the assets donated by your relative are of lawful origin, and that you and your wife are married, I don't see any difficulties. But of course the bank or brokerage house may demand other things. You can only be sure in a specific situation.
If you need our support, just contact us by WhatsApp or email!
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I'm Brazilian, I haven't left Brazil permanently, I don't have any assets or income here, but I do have a current account in Brazil. I'm currently living abroad with a non-Brazilian partner, we have a daughter together, and he would like to make me a donation to buy a property in Brazil, which should be around 20,000 euros in the first year. How should I proceed with taxes in this case? Thank you
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Hello, Andrea!
Thank you for your interest! If I understand correctly, you are still listed as a tax resident in Brazil, and your partner, who is not a resident, wants to donate funds so that you can buy a property in Brazil.
It's difficult to give a recommendation from a post. In any case, if you live abroad and have no ties to Brazil (you just want to buy the property), you might want to formalize your status as a non-resident. In this case, if you and your partner are non-residents in Brazil and he donates funds abroad to you, the operation would not be taxable in Brazil.
I put this idea to you, but I would need to understand your problem in more depth to give you a recommendation. If you need our help, just contact the team at contato@tersi.adv.br or by WhatsApp!
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Good afternoon Dr. Vinicius,
Please enlighten me if possible.
I've put a small property in Argentina up for sale. My share of the sale will be US$ 40,000, inherited from my father, an Argentine citizen who has lived there all his life. I am a naturalized Brazilian who has lived in Brazil for many years. I intend to bring this amount to Brazil. I intend to declare it in my tax return, and I suppose I have nothing to pay, is that right? What about ITCMD? Thank you very much. Marcela-
Hello, Marcela!
Thank you for your interest in our content. If I understand you correctly, you have inherited a share of a property in Argentina that belonged to your father, and your father was not a tax resident in Brazil. The property is for sale and you will soon receive the money corresponding to your share, which will be taken to Brazil.
If I understand correctly, there are two moments, first you received the inheritance, then you sold a property abroad. On the first point, in principle ITCMD would apply, Marcela, but the STF recognized that there is no complementary law stating which Brazilian state is competent to charge it, because the property is located abroad, the inventory must have taken place there and your father was domiciled abroad when he died. In this case, you would have nothing to pay in ITCMD, just report it as exempt income for IR purposes. On the sale of the property, however, you may be liable to pay IR on capital gains, if any.
This is just one possible scenario, which could change if your father was domiciled in Brazil when he died, for example. I hope I've helped you. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Good morning,
In my case, I'm not resident in Brazil, but I received a cash donation from my father (an advance on the inheritance). I don't intend to bring the money abroad, but to invest it in Brazil.
How do I declare the donation I received in Brazil? Do I have to do a Dirf or something?
Thank you
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Hello, Isabel!
Thank you for your question, it's a very unusual point to know whether a donation to a non-resident should be reported in the Dirf.
There is no income tax return for you to file because you are a non-resident. Your father will need to inform you in his declaration that he has made a donation to you, and the state tax on donations and inheritances (ITCMD) is due to the state in which your father is domiciled.
Since 2019, the Federal Revenue Service has taken the view that donations sent to non-residents are subject to 15% of IRRF (there is an IRPF exemption that is expressly provided for when the recipient of the donation is a tax resident in Brazil, but the law was silent on non-residents). If you were to follow this understanding, your father would have to collect this amount and submit a Dirf saying that he made a donation to you. I have argued that this understanding of the IRS is unconstitutional, because it charges as income tax something that is actually ITCMD. The Federal Constitution prohibits the Union from invading the tax jurisdiction of the states.
You can make your investments, if they are in real estate, as normal. There is no specific regulatory provision, only the need for a CPF. If you're going to make other investments, we have the Central Bank's regulations to take into account, and these are set to change considerably from 2023. It would be necessary to understand exactly how you intend to make the investments.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Hello, Marluci!
Thank you for your interest in our content. According to income tax legislation, the amount received as a donation is exempt from income tax. You only have to declare that you have received the donation, on the exempt income form, in order to say that it was received from your mother.
One point to comment on is that we have a state tax, the ITCMD, which is levied on donations and inheritances. The STF recently ruled that, in the case of a donor domiciled abroad, there is no formal requirement (complementary law) for the state to be able to charge this tax, so that, for the time being, it would be possible to receive this donation also exempt from ITCMD. You need to make sure that your mother is not a tax resident in Brazil (only in the UK) for this to happen. Otherwise, ITCMD will be levied, according to the law of the relevant state (maximum rate of 8%).
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Hello, good afternoon,
I'm not sure if I understand the text, could you help me? I have left Brazil permanently, and I'm going to receive a donation of 50% from a property owned by my aunt, and I already have the other 50% in my name.
I'm not sure if I'll have any problems paying the ITMCD, precisely because I've left the country definitively and I'm no longer declaring in BR
Can I pay the ITCMD without fear? lol Do I have to inform someone that I'm a non-resident or pay it differently? I mean, how do I report the income from the donation if I don't declare it anymore?Thank you very much
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Dear Dr. Vinicius
I live in Brazil and I made a donation in kind, sent abroad through a regular exchange contract, to my son who is a tax resident in Spain.
The bank withheld and collected IRRF at a rate of 17.647 % (instead of the 15% required by law) on the amount remitted. This tax was debited from my bank account, as was the IOF of 0.38 %. In addition, I made an extrajudicial declaration at the State Revenue Office, collecting the respective ITCMD. I would like to ask you if IRRF withholdings in these circumstances have already been contested in court at the SRF, with success for the taxpayer. -
Good morning, Dr. Tersi,
I'm not resident in Brazil and I've declared that I've left the country. Now I've received a donation from my father, who wanted to send me the money abroad, but they're charging me an absurd amount of income tax! How can I receive this donation without paying income tax? (I read that this law is unconstitutional) My other sisters live in Brazil and haven't had to pay any tax! -
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Hello, good evening! I am a resident in Brazil and I receive a monthly donation/contribution for day-to-day expenses from my brother-in-law who is a foreigner and not resident in Brazil. How should I declare it? I was told to use code 24 - Other on the Exempt and Non-Taxable Income form. Would this be correct and if so, is there a limit to using this code? As he doesn't have a CPF, I can't use code 10 for donations, right? Thank you!
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Good morning!
I'm Brazilian (dual citizenship) and I've been living in Italy since 2008. I'm tax resident in Brazil because I have income there. My husband and I, an Italian with no permanent Brazilian visa, want to sell our property in Italy, one in his name and the other in mine, in order to move to Brazil. Question: because the value is around €290,000 and our aim is to buy one property to live in and another as an investment, what taxes do we have to pay and what percentage?
Thank you
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Good afternoon, I'm a Brazilian citizen with my fiscal domicile still in Brazil, I also have a bank account and a house in Brazil. I have been living in Germany for two years and I got married a year ago and a few months ago I registered my marriage in Brazil. My husband has made a will in which I am his main beneficiary, including a house of great value. When I receive this inheritance, as far as I know, I will have to pay taxes here of course, but I have to declare these assets here to the Receita Federal in Brazil where I will have to pay these taxes again? My husband is encouraging me to sell everything and move to Brazil after his death. These are future projects, of course, but we still have many doubts about taxation in Brazil. I live here and have a bank account. Thank you in advance
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Dear Dr. Vinicius Tersi
After reading the article, I had a question:
I have a friend who lives in the USA, she left about 5 years ago - she has a tax residence in Brazil - she wants to give me a car as a donation, the car itself is over 30 years old. I intend, if the donation goes through, to bring the car to Brazil and register it with the Detran.
The question is: is there any tax on transporting the car and registering it with Detran to circulate normally?
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Hello, Vinicius,
I'm going to receive a cash donation from a relative in China. The donor in this case doesn't have a Brazilian ID and has no ties to Brazil other than being related to me. The information I have is that I can declare it as "other" exempt income, where it is not necessary to inform the donor's CPF. And according to the information I have obtained, there is no value threshold where income tax could be levied.
But I have doubts about how to proceed with the ITCMD in this case. According to the SP legislature, the tax is levied on amounts over 2,500 UFESPs. But according to the article, there is no complementary law for donations received from abroad. Does this mean that I can just declare the receipt of the donation as exempt income in the IRPF, and everything is fine? Is there any action to be taken with regard to ITCMD in this case? I would like to protect myself from any undue charges or possible fines for not declaring this amount to the state government.
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I live in the UK. I'm donating 50,000 pounds to my sister. I am a Spanish and Brazilian citizen. I have a bank account in Brazil (savings account), but it is not my tax residence, as I work and live in the UK. I understand that my sister must declare this money in Brazil as a donation. In that case, will she be exempt from paying tax, or should she? Thank you very much.
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We have a daughter (30 years old) who lives in Canada and has made her final declaration to leave the country. We (my husband and I) occasionally make remittances to her account and the reason is "Donation or other transfer without consideration". In the tax return, we declare it under DONATIONS MADE - code 80. We live in Rio de Janeiro and don't pay ITCMD - the exemption is 11250 ufir and the donation doesn't amount to that. Do we have to pay any income tax? If so, how do you pay it and where do you declare it on your tax return? We've read that we have to pay IR at a rate of 15% or 20%, depending on the country of destination, but we can't understand whether we have to pay anything or not and what the rate is.
Thank you. -
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Hi Tersi,
Thank you very much for your blog!
I've been reading about the change in the RF's understanding on the payment of IRRF on inheritances received by non-residents (from 2019 onwards). My first question is, what is the triggering event for this IRRF on inheritances received by non-residents? The transfer of the property from the estate to the non-resident heir? Or when the property is sold by the heir after the estate?
I declared my permanent departure in 2009 and in 2010 I received an inheritance from my mother, containing real estate and a car. Is the RF's new understanding (in 2019) retroactive?
Thank you very much,
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Dear Tersi Team,
Congratulations on your excellent work.
I live abroad, I'm not a tax resident in Brazil, but I still receive a monthly donation for the missionary work I do deposited in my current account in Brazil. Part of it comes from a church, which I believe is tax-exempt, and part from a company which, to reduce taxes, also contributes a small amount as a donation. I send this amount every month to help with my expenses here.
If I don't declare this amount in Brazil, should I declare it in the country where I live, since there is fiscal reciprocity between them? Do I have to pay tax if it's considered a "donation"?Thank you for your guidance.
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Hello, I am a foreign resident in Brazil with a tax domicile in Brazil, my father is selling a property in his country and as soon as he manages to sell it he is going to give me a sum of money over 100,000 euros, I would like to understand if these funds can be sent with a money order from abroad to Brazil for the purpose of maintaining residents and if I need additional documentation or the help of a lawyer so that the value of the international remittance is not withheld by Banco do Brasil, which is the bank I am thinking of using. When I spoke to Banco do Brasil's foreign exchange department, they told me that it would be possible to do this as a resident maintenance, but they don't have a specific phone number for foreign exchange and I spoke to them through the app's chat, but I don't know if they told me everything I need to know.
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I have a property abroad, I live in the USA and I declare this property in the IRPF (I haven't left the country) in Brazil and in the USA.
I am considering donating this property abroad to my daughter who is an American citizen and lives in the USA.
I think that if I decide to make this donation, I don't even owe IRPF (as this donation is exempt), nor ITCMD as the person who will receive this donation lives abroad.
I'm right????
Thank you in advance -
Good morning, if you can help me. I am Brazilian, I received an inheritance in cash from my grandfather in Israel, the donor my grandfather never lived in Brazil, as my father is deceased the inheritance was divided among the grandchildren in my case, In the IR there is the Exempt form - inheritance and donations, but it is necessary to inform the CPF of the donor, as the donor is not from Brazil does not have CPF. how do I inform this in the IR?
Thank you -
Good afternoon, Dr. Vinicius
I'm Brazilian, living in Brazil, and my American partner, living in the USA, needs to send me money as a donation so that I can buy property for him to live in. How would I declare these amounts? I've read that donations don't incur tax, but does that work for any amount? Does the IRS set a legal limit on the amount I can receive as a donation? Or would it have to be through another type of operation for higher amounts?
Thank you in advance for taking the time to answer my questions -
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Hello,
I'm a Brazilian from Rio de Janeiro and a permanent resident in the United States. I have declared my permanent departure from Brazil. I am receiving an inheritance from Brazil and the total value of my share would be around R$150,000. Do I have to pay tax in Brazil on this inheritance? If I have to pay tax, would it be on the total gross amount or on the net amount received after paying for certificates, inventory, broker's commission, etc.?
Thank you so much! -
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I'm Brazilian and my boyfriend who lives in the United States made random donations to my Brazilian checking account throughout the year, but on December 31, 2022 I had no balance, except 30,000.00 in CDB investment in this case I need to declare IRPF?
If so, do I need to add up the value of the whole year?
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