Miguel moved to Australia recently to continue his studies to become an architect. He also works part-time in order to support himself. With a large family in Brazil, they often ask him for help in paying bills.
Feeling like he was paying too much money in fees with his Australian bank, he made the decision to compare other options available to him in sending money from Australia to Brazil.
Money transfer Service 1
Money transfer service 2
1 AUD is equal to 2.11 BRL.
1 AUD is equal to 2.01 BRL.
$22 is charged for sending $1,000 AUD. This fee changes depending on the amount you are sending.
The sender is charged $60 for the transaction.
Amount received for $1,000 Australian dollars.
2108.36 BRL will be received by Miguel’s family.
2013.78 BRL when he uses this money transfer service.
With this money transfer service the time to send the money within a few minutes.
The time it takes to complete the transfer is typically ten minutes or less.
Your recipient will be picking up cash at one of the company's locations.
This is a cash pick-up service only. A member of Miguel’s family will need to present themselves to accept the money.
What’s the difference?
Not only does Miguel’s family receive 94.58 BRL with the second service, Miguel pays $38 AUD more for the transfer.
How to compare transfer companies when transferring money to Brazil
As you can see, there is a big difference in value between the two transfer companies that Miguel is looking into. Had he continued to use the second company without investigating his options, he would have lost a substantial amount of money over the time he spent in Australia. You can save yourself from the same mistake by checking the following features of different money transfer companies before your move from Brazil to Australia:
Exchange rate. Currency values will make a big difference in the cost of a money transfer service. Do not overlook this important aspect when comparing companies.
Fees. As you can see in Miguel’s case, there was a large difference in the fee charged for transferring money from Australia to Brazil. Keep in mind that these fees generally go up with the amount of money you are sending.
Pick-up options. Some transfer services will allow you to send cash to be picked up in Brazil, while most others will allow you to send funds from bank account to bank account.
Turnaround time. If you are often called upon to send money in an emergency, you will want to find a company that transfers the money quickly.
Transfer amounts. If you have plans on sending large quantities of money at a time you will have to check the policy of each company you look into. Most have a limit on how much you can send per transfer and even per day.
The Brazilian Real is not a common currency in Australia, making your options limited in sending money from Australia to Brazil. For this reason you may find it difficult to find a bank in Australia that will conduct the money transfer for you.
This means that you will most likely have to use an established money transfer service for the transaction. Here are a few options to look into when trying to find the best rates and fees:
Citibank. This Citibank Plus Transaction account is an everyday bank account which can send funds to any account anywhere in the world for free, using the Visa exchange rate for the day.
MoneyGram. This transfer service allows transactions between Australia and Brazil. Your recipient will be expected to pick-up the funds at one of their locations.
WorldRemit. With WorldRemit you can initiate the transaction online using a credit or debit card. Your recipient can either pick-up the money at one of their locations or have a debit card recharged.
Western Union. With Western Union you also have the option of sending the money from your computer. The recipient however will need to retrieve the money in person.
Tax and regulations for sending money to Brazil
Australians sent US$28 million to Brazil in 2017 through banks and money transfer services, according to the World Bank. But when sending a lot of money, your recipient could be on the hook for taxes regulated by the Brazilian Department of Federal Revenue.
Gift and donation taxation rates vary among the 26 states of Brazil, ranging from 4% in Rio de Janeiro to up to 7% in Santa Catarina. Beneficiaries of these gifts are responsible for declaring and paying this tax with their annual returns by April 30.
What are the penalties for not filing taxes on a large remittance?
If you fail to file taxes on a large money transfer, you could face a penalty equal to 20% of the tax in question. Brazil previously lacked any penalties for evading tax, but they've recently tightened their regulations. If you're caught in one of the country's irregular sweeps for unpaid taxes, that penalty increases to a stiff 75% of the amount you owe.
You could also be hit with jail time of six months to two years, with increased fines for subsequent evading.
Encourage your family and loved ones to include any large remittance on their annual tax return or speak to a tax professional for guidance.
Do I have to report large transfers out of Australia?
In Australia, you won't need to worry about reporting any money you send overseas. Money transfer companies and banks are required by law to report transfers over $10,000 as well as any suspicious transactions. The regulatory body in Australia is AUSTRAC (Australian Transaction Reports and Analysis Centre), and it collects this data to help prevent money laundering and terrorism.
DISCLAIMER: This article is general advice. It does not consider your own personal circumstances and may not be applicable to you. You should obtain professional advice and consider your own situation before acting on anything contained in our article.
If you are visiting Brazil and have lost your wallet you may have a few options worth exploring to replace any cash that was lost:
Your travel insurance. Depending on your policy, some travellers may be able to get emergency cash if they fulfil the correct requirements.
Cash transfer services. Transfer services are not exclusive to residents of Brazil. So long as you are in possession of your passport, companies such as Western Union and MoneyGram can be used to send you money from Australia to Brazil.
Your credit card company. Many platinum credit cards now offer forms of complimentary traveller protection with the use of their card. You may be able to contact them and get funds sent to you if you are left without any money due to an unfortunate incident.
According to the Australian Department of Foreign Affairs and Trade Australians who choose to travel to Brazil should exercise a high degree of caution. If you are picking up money at a money transfer location you should take every possible precaution before heading out. Only go during the day and make sure you travel by reliable means with someone you trust.
You will need precise information for your recipient when sending money from Australia to Brazil. Prepare yourself and them ahead of time by having the following information ready:
Name. You will have to know the exact name on the recipient’s identification. Check the paperwork given to you before leaving the location to make sure that the agent has also spelled it right.
Transfer number. At the conclusion of your transaction you will be given a transfer number. The recipient will have to know this number in order to pick up the money. Make sure that you can easily reach them and give them this number.
Amount. The recipient will be asked for the amount sent along with your name and possibly your contact information. Make sure that they know all of this before they go to the pickup location.
Security question. In some cases you can arrange for a security question to be answered by the recipient as further proof of identification.
You will receive documentation at the conclusion of your transaction. Make sure that you save this in the event your recipient has a problem with collecting the money.
Once you have found the money transfer company that gives you the best rates and fees, you will find that you are able to send even more money back to Brazil. Carefully conduct your investigation into all of the options available to make sure that you are getting the most value for your hard earned money.
Shirley Liu is Finder's global program manager. She was previously the publisher for banking and investments and has also written comparisons for energy, money transfers, Uber Eats and many other topics. Shirley has a Master of Commerce and a Bachelor of Media, Journalism and Communications from the University of New South Wales. She is passionate about helping people find the best deal for their needs.
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