It comes to no surprise that some Brazilians are constantly considering the possibility of holding part of their assets abroad. Whether it is financial, real estate, or business investment, this is a topic that frequently appears in law firms that work with estate and succession planning, as well as in banks and family offices.
There are several reasons that lead Brazilians to want to navigate new waters: security, investment in hard currency, diversification, etc. Something that has always been explored and never lead to any concerns or care. This path began with many illegal remittances and structures, went through a wave of regularization by Brazilians ten years ago via the Special Regime for General Regularization of Exchange and Tax Assets (RERCT) and is currently experiencing a new chapter.
Starting with the enactment of Law No. 14,754/23 (which came into effect on January 1, 2024), the Federal Government now has new rules for taxing investments abroad, in addition to regulating the additional obligations of those who have this type of investment.
In addition to the additional complexity of this matter, the way in which income from abroad is taxed has become much more delicate.
In general terms, with the new legislation, taxpayers with foreign financial investments and investment vehicles abroad are now subject to income tax at a rate of 15%. Those who had losses on their investments could use them to offset them in subsequent years.
What could be seen in the income tax return of individuals with this type of asset was that the amounts paid in taxes are so significant that some need to rethink whether it is even worth having the investment abroad (only from a tax perspective).
The way the rationale for applying the tax was construed means that the actual income of taxpayers is substantially reduced – especially due to the Federal Revenue Service’s guidance that all income (even if not realized) be taxed annually.
As if that was not enough, among the changes proposed by Provisional Measure No. 1,303, published on June 11, 2025, is the increase in the tax rate for these investments and structures abroad to 17.50% and the definition that losses incurred in financial investments must be offset within a period of 5 years.
In other words, something that is still being tested by taxpayers due to the recent change in legislation is already at risk of being changed. This makes it impossible, or at least difficult, for Brazilians to have legal certainty to think about their assets and their goals. After all, they have not even had a reasonable period of time to experience the impacts of the new legislation and are already being surprised by another possibility of tax increase.