Tax guidelines and regulations for large money transfers into Brazil

Both you and your recipient could have to report the transfer on your taxes.

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Americans sent $637 million from the US to Brazil in 2015 through banks and money transfer services. But when sending a lot of money, your recipient could be on the hook for taxes regulated by the Brazilian Department of Federal Revenue — and you could be responsible for notifying the IRS.

How Brazil regulates large remittances

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.

Some states will exempt gifts up to a certain amount from the tax — the specific amount also varies by state. Check the tax code of your recipient’s state if you want to calculate the exact amount that will be owed before transferring money.

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    What are the penalties for not filing a large remittance?

    Brazilians are among the biggest tax evaders worldwide, largely due to an absence of penalties until recently. If you fail to file taxes on a large money transfer today, you could face a penalty equal to 20% of the tax in question. 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 the US?

    Usually, yes — though it depends on the size and purpose of the transfer. If you’re sending more than $15,000 as a gift or more than $10,000 for business purposes, or if you’re transferring money to a foreign account in your name that’s held $10,000 or more at any point in the last year, you’ll have to let the IRS know.

    By law, banks are required to report cash transactions that exceed $10,000 and transactions of any amount they find suspicious. For independent money transfer businesses, that thresholds can be as low as $1,000. Which means that if you don’t file your taxes correctly, it’s very likely that the IRS will know.
    Sending a lot of money out of the country? Know what the IRS expects of you.

    How much money can I send to Brazil?

    There’s no legal cap on the amount of money you can send to Brazil, but some transfer providers will impose their own limits. If you’re planning a large transfer, use a secure provider with no limits, like XE.

    How will my recipient in Brazil get the money?

    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 the 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.

    How to send money to Brazil

    Bottom line

    If you’re sending money to someone in Brazil, there’s a good chance they’ll need to pay taxes on it. On the bright side, the process is simple and they’ll be able to just include it with their yearly tax paperwork.

    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.

    Frequently asked questions

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    2 Responses

    1. Default Gravatar
      SoGOctober 22, 2018

      Is there any way to transfer USD to a Brazil nonprofit? Everything I read seems to be individual to individual. How about from a US nonprofit to a Brazil nonprofit?

      • Avatarfinder Customer Care
        AnndyNovember 5, 2018Staff

        Hi SoG,

        Thanks for your question.

        If you want to send USD to an organization or business in Brazil, you may check this page to compare your money transfer options. You can enter the amount that you want to send on the calculator on top of the comparison table to see how much your recipient will possibly receive using a particular service.

        I hope this helps.

        Cheers,
        Anndy

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