This information was prepared by tax experts at a non-affiliated third party at Citi’s request for your
general reference only
Brazil
Brazil taxes Brazil residents on their worldwide income.
Current Trends
There are several provisions in the Brazil tax law, which have the purpose of countering “tax evasion.” Below are
some of those measures:

There are provisions to tax the profits of subsidiaries, affiliated and controlled companies located abroad,
through CFC (Controlled Foreign Corporation) regimes. However, these provisions are applicable to corporate
shareholders of CFCs and not to individual residents who are shareholders of CFCs. There has been proposed
legislation to expand the taxation of CFC income to individual shareholders but this has not been enacted into
law.

There are transfer pricing rules regarding transactions made with related companies or parties located in tax
haven countries.

There has been an increase in the withholding tax rate from 15% to 25% on gains and income paid to investors
located in tax haven countries. There are thin capitalization rules that apply to loan transactions made with
parties located in tax haven or privileged tax burden countries, as well as related parties.

There are specific conditions allowing the deductibility of expenses regarding payments to parties located in tax
haven or privileged tax burden countries.
The Capital Abroad Survey (CBE) was created in 2001 and requires Brazilian tax residents to annually report
foreign held assets of US$100,000 or more.
Brazil has implemented automatic annual account information reporting under the US FATCA regime. This system
is reciprocal. Thus, Brazilian account information of US persons is reported to the US IRS and, similarly, US
account information of Brazilian residents is reported to the Brazilian tax authority. Brazil is also implementing the
OECD Common Reporting Standard (CRS) regime, with the initial reporting of account information for 2017, to be
filed in 2018. The CRS regime is also reciprocal. Thus, Brazilian residents with offshore accounts in CRS countries
will be reported to the Brazilian tax authority and, likewise, non-residents of Brazil who reside in CRS countries and
who have Brazilian accounts will be reported to their country of residence.
Direct and Indirect Ownership of Investments Accounts
Both the US FACTA regime and the CRS regime require reporting of accounts held directly by the individual
taxpayer and indirectly, through personal investment companies, trusts or foundations. However, Brazilian tax law
does not currently have specific provisions to tax income of controlled foreign corporations (CFCs) at the individual
shareholder level, as it is earned by the CFC.
Brazil as a CPB Booking Center for non-residents of Brazil
Brazil is a CPB Booking Center Country. As noted above, for non-residents of Brazil with accounts placed in Brazil
directly or indirectly (through intervening legal structures), there are several regimes permitting or requiring account
information to be reported to the tax authority of the direct or indirect account owner’s country of residence. For
example, Brazil has implemented a Model 1 IGA for US FATCA purposes and will report information about
Brazilian accounts beneficially owned by US persons to the US IRS. Brazil will also implement CRS reporting of
2017 account information in 2018 and thereafter. Thus, Brazil will report information about Brazilian accounts to the
tax authority of the countries participating in CRS (estimated to be 100 countries by 2018). Brazil also has treaties
to avoid double taxation of income signed with various countries, and those treaties include an article dealing with
exchange of tax information.
Amnesty and Disclosure Regimes for residents of Brazil
There is a beneficial voluntary disclosure regime in Brazil. Specifically, penalties for unpaid taxes (the voluntary
disclosure extinguishes criminal, tax and foreign exchange penalties, e.g. the Brazilian Central Bank penalty that
could sum up to BRL 250,000.00 the payment would be reduced to only 30% if the Taxpayer voluntarily discloses
previously undeclared assets and income. Also, in previous years, the Brazilian Government had, on occasions,
implemented additional beneficial conditions for the payment of overdue federal taxes (in cash or in installment
payments) where, under certain circumstances, there would be additional reductions of interest and underpayment
penalties. These additional beneficial payment terms are not presently in force and it is uncertain whether or when
they might be re-introduced by the Brazilian Government.
Applicable Tax Transparency Regime
US FATCA
Person with Brazil accounts reported under a reciprocal agreement that
US
also requires reporting of Brazilian residents with US accounts
UK CDOT
n/a
EUSD
n/a
OECD CRS
CRS reporting of 2017 account information, to be filed in 2018,
Reciprocal
and thereafter, between Brazil and CRS-participating countries
Tax Treaty Information
Exchange
exchange of information between Brazil and numerous
Reciprocal
countries, upon request
Other Tax-Related Considerations
Voluntary Disclosure
Program?
Yes
See note above
Residents taxed on a
worldwide basis?
Yes
No specific rules to tax income of controlled foreign corporations at the
individual shareholder level. However, legislation for such rules has been
proposed in the past and may be re-proposed in the future
This information is made available for general reference only. It does not constitute legal or tax advice. Citigroup Inc. (Citi), its affiliates, and
its employees are not in the business of providing tax or legal advice to any taxpayer outside of Citi and its affiliates. These materials are not
intended or written to be used, and cannot be used or relied upon, by any such taxpayer for the purpose of avoiding tax penalties. Citi and its
affiliates comply with applicable laws and regulations. This information was prepared by tax experts at a non-affiliated third party at Citi’s
request for your general reference only. While Citi aims to acquaint you with current and imminent tax transparency initiatives around the
globe, we encourage you to seek third party professional advice regarding your personal tax situation.
This information is provided as of August 2016. However as the environment is rapidly changing, please consult with your tax advisor to be
sure you have the up-to-date information. Citi and its affiliates make no representation, recommendation or warranty, express or implied,
regarding the accuracy, adequacy, reasonableness or completeness of the information contained herein.
Note that all references to “resident,” “residents” or “residence” is intended to be a reference to tax resident, tax residents or tax residence,
under the applicable tax laws.