As of this year, sending money abroad will become more expensive. According to a new understanding by the Federal Revenue Service, remittances are subject to the withholding of Withholding Income Tax (IRRF), with taxation of 15% to 25%.
Any transfers related to inheritance, donation, and tourism or business travel expenses will be taxed. Expenses with education, support of dependents, and medical expenses abroad remain exempt. Specialists warn that care is needed when specifying the reason for sending the remittance in order to avoid taxation.
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“Each remittance has a nature that must be respected, with the proper recording of the financial transaction. There is no trick or sleight of hand to get around the situation,” explains attorney Rodrigo Rigo Pinheiro, partner at Leite, Tosto e Barros Advogados.
He warns that irregular conduct may be identified as fraud and classified as a tax crime, which may lead to the payment of a fine. The change is provided for in Consultation Ruling No. 309 of the General Coordination of Taxation (Cosit), published on December 31, 2018, in the Official Gazette of the Union (DOU).
Exemption for sending money abroad
In the new text, the Federal Revenue Service points out that “the amounts remitted as a donation to a person resident or domiciled abroad, whether an individual or a legal entity, are subject to the levy of IRRF, at the rate of 15%, or of 25%, in the event that the beneficiary is resident or domiciled in a country or dependency with favored taxation.”
Expenses with education and health outside Brazil remain exempt from taxation. This includes expenses with courses, technical books, tuition fees, conferences, seminars, and proficiency examinations, in addition to medical expenses.
The transmission of inheritances, donations of any kind (to charitable institutions, for example), payment of salaries of service providers, and travel expenses (tourism and business), on the other hand, are subject to taxation of 15%. If the amount is sent to countries known as “tax havens” – where taxation is reduced or nil and financial transactions do not need to be identified – there is a tax of 25%.
Source: Estadão
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