Large money transfer to Brazil. What will happen?

Set up a company in your name only, and pay yourself (or her) a dividend then deposit it in her account if you are so inclined. Probably cheaper IMHO unless the government plans to introduce their tax on dividends actually goes thru at a higher % level than is being "suggested".

Personally, I'd just open up a corporate account with sole signing authority, and keep her off it in order to manage things.

Hire an accountant to compare her payment of personal tax, which is unavoidable, to that of tax on dividends first obviously. And any other considerations, if you do plan to pay her. Brasil and  Belgium have a tax treaty.

You'll have to satisfy your banker the funds are clean.

Banks here do not tax you either. Perhaps wording was lost on translation.

Been there, done that, and now doing it again kkkkkkkkk selling our last RE asset in Canada and my banker wants copies of the sales document and cheques.

My second bank I'm getting established with here right now said I can basically transfer thru online remittance services about R$50,000 before the RF has to find out.

Start up a Belgian fries stand.......you'd make a killing as Brasilian's love their fries......and the way you cook them with Duck Fat is to die for......I grew up for 10 years in NW Germany.

    Set up a company in your name only, and pay yourself (or her) a dividend then deposit it in her account if you are so inclined. Probably cheaper IMHO unless the government plans to introduce their tax on dividends actually goes thru at a higher % level than is being "suggested".Personally, I'd just open up a corporate account with sole signing authority, and keep her off it in order to manage things.    -@Gasparzinho 777

In Belgium, or in Brazil (São Paulo)?

In Belgium I don't think it's cheaper. For Brazil I think it would take me a long time because I live/work in Belgium and that will be so for multiple years. Is it hard to set this up from a distance? Crypto markets are very time sensitive and the withdrawal would have to be made before 2026.

I prefer keeping the crypto profits away from the bankers and the tax hawks (legally) in the first place, but it is not easy. I can take profit before the price plummets, and convert the profit to stablecoins (pegged to the USD for example). This way the profit would not pass to any bank and not be subjected to taxation. But these stablecoins are likely to be attacked by governments. If/when it loses the peg, the money is gone. This has already happened to some of my friends before.

I can also just leave the profit on an exchange platform. But again if the exchange gets in trouble, the money is gone.

A lot of this seems to call for debate. I can withdraw 40k as "profit" in 2025 and lose the entire investment if things go bad in 2026. But regardless, I assume that governments and tax hawks will still want a share of money that was lost in 2026 because it was profit in 2025. I don't think it's fair but I do think it's how it works.

I'm talking in Brasil.

You have to pay some tax in the country, if you want to spend large amounts of money here.

Hire an accountant.

It is actually quite complicated to open a Ltda company here in Brazil - I have done it several times, as I have acted as the administrator for many other expats seeking an Investor Visa.

You ceratinly can do it as a non-resident without a permanent visa, but then you have to appoint a Brazilian or resident as adminstrator to oversee everything initially, as a non-resident cannot administer a company here. That person will need to have a (minimal at most) shareholding, but will have complete control over the company - and its bank account. So 100% trust will be crucial.

IMO your best option will be to open a bank account in your wife's name in Belgium, deposit all funds there, and then she will be able to make several small transfers (ie less than R$10k at a time) to her bank account in Brazil without attracting any interest from the authorities, as it will be her personal money.

However, clearly this is tax evasion, not avoidance, so you need to accept that if you make a profit anywhere in the world, one way or another you are probably going to have to pay tax on it! The trick is to minimise this (avoidance), and for that you need to talk to accountants - probably one in each country.

It is also entirely possible that the cryptocurrency market could crash and burn within the next couple of years - then this will not be a problem...!!! Good luck.

Bitcoin halving is likely to start in April 2024: https://www.nicehash.com/countdown/btc-halving-2024-05-10-12-00. I feel curious about your strategy for taking earnings by the end of 2025.

I'm not familiar on how to proceed with such case, but it seems like managing taxes could be challenging, considering your plan is buying and selling in different countries and under different names? If I understand correctly ...

@Wout

Hello,

I'll first suggest you speak with a tax professional in Brazil, and frankly in Belgium too.  I did a bit of research, and from what I can tell you'll almost certainly be evading some taxes in Belgium, however the taxes in Brazil could end up being lower than just straight up paying in Belgium, possibly.

Here's a guide I found on Belgium crypto taxation:

https://www.blockpit.io/tax-guides/crypto-tax-belgium

I can't find reference to where you'd pay over 50% tax on the gains.  It does seem to say most crypto gains are taxed as capital gains, at 33%.  In some cases (for professional traders) crypto can be taxed as earnings, for which the tax can be up to 50% over 41k of earnings but you haven't crossed that threshold of earnings and it doesn't sound as though you'd fall into that category.

It sounds like what you're proposing is to transfer the crypto to a wallet, which she would transfer to an exchange in Brazil, then cash out the crypto on the Brazil exchange, and then transfer the proceeds to a Brazilian bank. If I have that right, it's murky at best to acquire assets in one country as that countries tax resident, then move those assets somewhere else for more favorable tax treatment.  Because this could be seen as tax evasion you'd definitely want to check with a professional in Belgium on taxes relating to gifting the crypto to your fiancé/spouse, any 'exit tax' ramifications and so forth.

The tax in Brazil is not a straight 15% from what I understand.  The new tax law applies to crypto held in foreign accounts, and it seems domestic is taxed at cap gains rates, which vary between 15%-22.5%, and may only apply to withdrawals over R$35k / month. 

With respect to some of your original comments, the tax is not taken by the bank you deposit funds in.  Instead you need to prepare a DARF, which is a tax statement used to files taxes on income or gains not taxed at the source, then pay that DARF through your bank.

Some reference material:

https://coinpanda.io/guides/crypto-taxes-brazil/

The new 15% tax applies to crypto held on foreign exchanges, but basically makes it the same as domestic transactions:

https://beincrypto.com/brazil-crypto-tax-overseas-exchanges-2024/

It may be more productive and less risky to look into whether you can be considered a "Bon père de famille" class of investor in Belgium.  The first article linked above references this tax category.  If the SPF of Belgium considers you such an investor you may be subject to 0% tax on the capital gains.

Here's a self assessment questionnaire the Belgium SPF provides to help you determine if you're a 'prudent investor', and possibly not subject to tax on the crypto.

https://www.ruling.be/sites/default/files/content/download/files/liste_questions_cryptomonnaies_fr_2022.pdf

It seems as though if the crypto investment represents a small portion of your assets (perhaps you own a home which may offset this and show it as a smaller portion of your net worth, for example), you've held the crypto for a while, and you don't carry out many transactions (trade actively), then perhaps you may qualify.

Best of luck

IMO your best option will be to open a bank account in your wife's name in Belgium, deposit all funds there, and then she will be able to make several small transfers (ie less than R$10k at a time) to her bank account in Brazil without attracting any interest from the authorities, as it will be her personal money.
   
    -@Peter Itamaraca

She works here in Belgium and pays income taxes here. A lot of them, like most of us. I can't deposit my crypto profits straight into her bank account. I first have to transfer my coins to her crypto account. And from there she would have to convert coins to cash on the exchange platform, and move that cash to her bank account. Either here or in Brazil.

The moment that this money touches her Belgian bank account, it will be seen as profit, forwarded to tax authorities and taxed 50%. And next, her social contributions will rise drastically because she would be considered a high salary earner in Belgium --> highest tax bracket. It basically comes down to 65% tax on all profits. So this is not an option. Furthermore, if the money is reinvested 1 year later and all of it is lost, the government will still want a 65% cut of the profits that no longer exist. It makes me angry but it is what governments do here. If they take 65% it is better to never withdraw the crypto profits in the first place. Then it is better to accept a 50% market crash and start again from there.

I thought about sending the coins to her crypto account (currently empty) and have her withdraw those profits directly to a Brazilian bank account. Taxes are 15% according to what I have read recently. And she could do it in parts under 10 000 reais as you mentioned.

Tax avoidance vs tax evasion is up for debate. I don't consider 65% of profits taken a tax. It is legalized confiscation.

The options I saw to avoid it are

1) donating it to a person of trust, in a foreign country with different tax laws

2) moving to a tax friendly country

3) Not withdrawing profits and accepting market crashes

02/10/24 @BRBC.  Excellent answer.  This is an area to only enter with expert advice, as you explain.

    It is actually quite complicated to open a Ltda company here in Brazil - I have done it several times, as I have acted as the administrator for many other expats seeking an Investor Visa.You ceratinly can do it as a non-resident without a permanent visa, but then you have to appoint a Brazilian or resident as adminstrator to oversee everything initially, as a non-resident cannot administer a company here. That person will need to have a (minimal at most) shareholding, but will have complete control over the company - and its bank account. So 100% trust will be crucial.        -@Peter Itamaraca

I used my lawyer for that function......and did a share transfer later on to a family member until I got my VIPER in 2017.

I can't find reference to where you'd pay over 50% tax on the gains.  It does seem to say most crypto gains are taxed as capital gains, at 33%.  In some cases (for professional traders) crypto can be taxed as earnings, for which the tax can be up to 50% over 41k of earnings but you haven't crossed that threshold of earnings and it doesn't sound as though you'd fall into that category.

This is changing rapidly. The laws you described were only approved last year. It mentioned a classification (amateur - casual trader - professional trader) but its criteria were left open for debate. Things like "not taking many risks" and "not investing lots of money". Currently the government is working on a separate tax bracket that adds crypto profit to the income tax, and I already pay more than 50% on that through my regular job. Also it is only a matter of time before the gains will put me in the highest category anyway. The crypto market, although volatile, grows at parabolic rates.

It sounds like what you're proposing is to transfer the crypto to a wallet, which she would transfer to an exchange in Brazil, then cash out the crypto on the Brazil exchange, and then transfer the proceeds to a Brazilian bank. If I have that right, it's murky at best to acquire assets in one country as that countries tax resident, then move those assets somewhere else for more favorable tax treatment.  Because this could be seen as tax evasion you'd definitely want to check with a professional in Belgium on taxes relating to gifting the crypto to your fiancé/spouse, any 'exit tax' ramifications and so forth.

Evasion and avoidance are not the same thing, although banks like to confuse those terms. If I convert euro to real, wait until the real strengthens and then convert back to euro, there is no tax on the gains. But if I convert to digital money which is out of their control, there suddenly has to be a tax on the gains. It's as if they don't consider things like bitcoin money, which is false.

I expected that they would attack their competitors with taxation but it's not going to work because we can pay directly in crypto without any conversion taking place. The idea behind crypto was to exchange value without government or bank interference, in privacy. They can not stop this, because they would have to turn off the internet globally.

I would have to speak to a lawyer indeed but I believe that transferring digital assets to the country with the lowest taxes is avoidance (legal), not evasion. However, I believe it is important that the assets are in her name before profits are realised.

As her husband we would share our wealth and I can't imagine there is a tax when I send money to my own wife. Legally it says there is, but I have already spent thousands of euros on her education here. I was financially responsible for her during her whole period as a student here. If I can't send my digital assets to her without a large tax, I can just send fiat money to her so she can buy the digital currencies, and then cash those out in Brazil. It comes down to the same thing.

Governments are trying to regulate exchanges, but there are plenty of ways to buy bitcoin without the identity of the buyer being known (non KYC exchanges like Bisq), which makes taxation impossible. If they don't know what we own, they can't tax it.

The tax in Brazil is not a straight 15% from what I understand.  The new tax law applies to crypto held in foreign accounts, and it seems domestic is taxed at cap gains rates, which vary between 15%-22.5%, and may only apply to withdrawals over R$35k / month. 

This confuses me. If a Brazilian makes 10 000€ on Binance (foreign exchange) and withdraws it, he is supposed to pay 1500€ tax (15%). Does it stop there or is there a subsequent domestic capital gains tax?

Either way the whole idea to tax digital money this way seems silly to me. What it will lead to is that people do not convert their digital money to fiat currency. They will just keep the digital money and pay directly in it, which is already happening in my country.

With respect to some of your original comments, the tax is not taken by the bank you deposit funds in.  Instead you need to prepare a DARF, which is a tax statement used to files taxes on income or gains not taxed at the source, then pay that DARF through your bank.
Some reference material:
[link under review]

The new 15% tax applies to crypto held on foreign exchanges, but basically makes it the same as domestic transactions:
https://beincrypto.com/brazil-crypto-tax-overseas-exchanges-2024/

Indeed the banks don't take the taxation but they do flag tax authorities depending on amounts of money coming in (in Belgium). Just a few weeks ago the principal at uni explained to the post grad students which algorithms the tax office is using to flag people via the bank. It happens automatically.

It may be more productive and less risky to look into whether you can be considered a "Bon père de famille" class of investor in Belgium.  The first article linked above references this tax category.  If the SPF of Belgium considers you such an investor you may be subject to 0% tax on the capital gains.

Here's a self assessment questionnaire the Belgium SPF provides to help you determine if you're a 'prudent investor', and possibly not subject to tax on the crypto.
https://www.ruling.be/sites/default/files/content/download/files/liste_questions_cryptomonnaies_fr_2022.pdf

It seems as though if the crypto investment represents a small portion of your assets (perhaps you own a home which may offset this and show it as a smaller portion of your net worth, for example), you've held the crypto for a while, and you don't carry out many transactions (trade actively), then perhaps you may qualify.

Best of luck
   

    -@BRBC

I've looked into this before. For bitcoin most people do not sell often, as the long term expectation is that it will be worth a lot more in 10 years than it is today. I'm just looking to buy more BTC when the price is low.  This can take a long time, which helps me fall in the category of the bon père de famille and legally avoid taxation. In many Western countries there is no tax if you have held crypto for 1 year or longer.

There is much more money to be made in altcoins (every other crypto currency) but these markets are volatile and require short term trading (days/weeks/months) to be profitable.

@Wout

"Evasion and avoidance are not the same thing, although banks like to confuse those terms."

Yes I used 'evasion' intentionally.  I'm not passing judgement though but I would be surprised if that works out to be legal.  A Belgium tax attorney is likely the correct expert to consult with on this.

"This confuses me. If a Brazilian makes 10 000€ on Binance (foreign exchange) and withdraws it, he is supposed to pay 1500€ tax (15%). Does it stop there or is there a subsequent domestic capital gains tax?"

My understanding is there would be no additional cap gains tax.  My understanding is cap gain is used for domestic exchanges/gains, and the law you inquired about relates to crypto assets held on foreign exchanges (and foreign financial assets in general).

" I'm just looking to buy more BTC when the price is low.  This can take a long time, which helps me fall in the category of the bon père de famille and legally avoid taxation."

My question is rhetorical, but if you have looked into this before, and you do qualify, why wouldn't you take 0% tax in Belgium over 15% tax in Brazil?  Presently you're not a Brazilian tax resident, so if you ever become one in the future you wouldn't owe Brazil tax on you prior realized capital gains. It would seem to make the most sense to cash that crypto in while in Belgium, pay 0%.

@Wout

I am not qualified to give financial advice but the only caution that I am offering is to make sure that your crypto investments are NOT part of any financial scams.

The only reason that I am mentioning is that my father-in-law was targeted and it was his friend who prevented a disaster.

Hope that this is not your case.

Good luck.

My question is rhetorical, but if you have looked into this before, and you do qualify, why wouldn't you take 0% tax in Belgium over 15% tax in Brazil?  Presently you're not a Brazilian tax resident, so if you ever become one in the future you wouldn't owe Brazil tax on you prior realized capital gains. It would seem to make the most sense to cash that crypto in while in Belgium, pay 0%.
   

    -@BRBC

My portfolio is roughly 50% BTC, for which I qualify as the "good housefather". I buy when the price is low, hold, and don't sell unless a large crash is expected. It basically correlates with the S&P500 and 2024 is expected to be a good year, so I can hold for 1 year and pay 0% theoretically.

The other 50% = altcoins, which are far more volatile. This also means I have to sell regularly and holding for 1 year is not an option. This would make me a trader, potentially even a professional one throughout the years. For example there are coins that I expect to make an 8x return in less than 1 year. It's for these tokens that it matters. And it's not clear if selling these tokens also affects what the IRS wants to do with my BTC profits. I don't know if I can be a "good housefather" for 1 token, and an amateur for the other.

Going by my instincts, I think they will judge the situation in the way that generates the most tax revenue for them.

As for the legalities of the plan with my wife: I've researched that before. It's just a bit too long of an explanation to summarize here.

I don't know if I can be a "good housefather" for 1 token, and an amateur for the other.

    -@Wout

I meant good housefather/amateur for 1 token, and trader for the other. I was in a rush

@Wout

I'm not an expert, so some of these ideas might suck.   If anyone's an expert, please offer your feedback, as I haven't been to Brasil in several years, so this may not apply any longer.

But here are some thoughts:

1)  If it is too costly & too much hassle to 'cash-out' Crypto (or any other assets) directly to a Brasilian bank, then maybe just transfer it to a bank (or other fin. entity) in a nation which is easier to deal with.  In my case, the USA.  But maybe others are better, I haven't checked

2) Coordinate Item #1 with a Credit Card(s) which is(are) easy to use Internationally. Make purchases in Brasil with the Credit Card, Pay the balance each month in your 'Home' country.   That way, you're able to use your money, but not get taxed / scrutinized on it (as much).   I guess the analogy would be that your purchasing activities come from debt, not income.  And, if you Pay-in-full each month, you're not incurring interest.

But to clarify:  This IS NOT a CC issued by a Brasilian Bank, it is one issued by your home country bank (again, my case, it would be like a Wells-Fargo, Bank of America, Chase,AMEX,etc). 

You also likely benefit from your CC's points, airline miles,cash-back programs.  Also, when you use your CC, you can take advantage of the daily FOREX prices...not to mention, you don't have to deal with converting USD to BRL.

There are all sorts of caveats, like a limit on how much you can purchase with your CC, etc.

Anyway, let me know what ya'll think.

@Gasparzinho 777

Hi. I sent a PM w/ a question.

Best Regards,

John Pastor

(AL, GA - Bal. Camboriu, SC)