By now it should come as no surprise that foreign residents of Brazil are subject to taxation on both their local income and their income abroad. Income taxes are filed yearly with the Brazilian IRS (Receita Federal). But that’s not the only filing that foreigners have to make. What is more often overlooked is the CBE declaration – Capitais Brasileiros no Exterior – with the Central Bank.
Brazil’s Central Bank (Banco Central do Brasil) requires that every year Brazilians and foreigners residing in Brazil declare any assets they have abroad. This applies both to individuals and to businesses. The declaration must reflect any wages, rental income, capital gains, compensation, investments, accounts or other assets totaling USD$100,000 or more as of December 31, 2016.
This year the declaration is due on April 5.
Wondering if you have to declare your assets? Here’s a list of who qualifies as a foreign resident subject to the Central Bank’s CBE declaration:
- Naturalized foreigners;
- Foreigners with permanent residency;
- Foreigners with temporary visas from employment contracts in Brazil; and
- Foreigners with temporary visas without employment contracts who have been in Brazil for over 183 days.
Anyone who falls under these categories should be aware that failure to declare qualifying assets or filing false information can result in a fine of up to 250,000 reals (approximately USD$80,000 by today’s exchange rate) issued by Brazil’s Central Bank. The Central Bank may also issue fines if the CBE declaration is not filed by the deadline of April 5 at 6pm. There is no precedent in Brazil for getting an extension to file as is common in other countries.
For individuals, your declaration can be made using foreign bank statements for the year 2016. Businesses can show their annual balances that demonstrate their profits or deficits. Considering the deadline is quickly approaching, you’d be well advised to begin preparing your declaration and the required supporting documentation.
