Is Your Offshore Company Costing You 15%?
Brazil’s CFC rules are automatic — and shocking.
Is Your Offshore Company Costing You 15%?
Brazil’s CFC rules are automatic — and shocking.
Brazil treats your foreign company’s profits as yours on Dec 31 — even if the money stays offshore. No deferral, no exceptions. It’s the law under Lei 12.973/2014.
150%
Penalties for non-compliance can reach up to 150% of the tax owed, plus criminal charges for evasion.
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For many expats and investors, this comes as a shock.
Calculate your foreign profit correctly
File your Brazilian tax return by the deadline
Pay the 15% flat tax annually
✘ Mito
I can avoid tax by never bringing profits back to Brazil.
✓ Verdade
Brazil taxes profits annually as if they were distributed — no matter where the cash is.
Who is considered a controller?
Anyone with >50% voting capital or power to appoint admins, or >50% equity in tax havens.
Dica
Pro tip: Even a US LLC that is disregarded for US tax can be taxed as a separate company in Brazil. Get professional advice.
Don’t gamble with penalties up to 150%. Understand your obligations and file correctly.