Here's what to know about taxes when transferring money into Brazil.
You could have a number of reasons for sending a large money transfer to Brazil, for example, you may be supporting a student studying in São Paulo or starting a business in Rio de Janeiro. No matter what it is, you'll want to consider the laws and legal paperwork involved, especially if it's a large transfer. Before you move your money out of Australia, familiarise yourself with these laws and regulations.
How Brazil regulates large remittances
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.
How will my recipient receive my remittance in Brazil?
When sending money to your friends and family in Brazil, you'll typically have the option of a bank-to-bank transfer, cash pickup or mobile wallet delivery.
To pick up your transfer in person, your recipient may need to show ID or a confirmation number. For other transfers – like to a Brazilian bank or money transfer company – they may not need to provide anything to receive it.
As with all international money transfers, be wary of potential fraud and only send money to people you know. Using a reputable provider can safeguard you from potential scams.
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.
Compare companies for your next large transfer to Brazil
Despite being in US dollars, all the below companies send money to Brazil. Use the calculator to input how much you want to transfer and the table will give you an idea of what it looks like at each company.
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