Recent developments

Have there been any notable recent developments in the provision of private client and offshore services in your jurisdiction, including any regulatory changes or case law?

Due to the current political and economic instability in Brazil, wealthy individuals usually use foreign jurisdictions to protect part of their assets. Following the alignment of national policies with the international initiatives regarding tax transparency, control of base erosion and profit shifting led by the G20 and the Organisation for Economic Cooperation and Development, Brazilian individuals have been invited to review their compliance with tax rules; their wealth management has become an important part of this procedure.

Brazil has signed the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports, which was ratified on 1 June 2016, according to Decree 8,842 of 29 August 2016. Besides tax transparency initiatives, the agreement covers collaboration and participation on simultaneous tax inspections and the collection of tax, including protective measures and formal notifications carried abroad.

Brazilians are thus currently facing a new challenge: the management of assets held internationally with full disclosure to Brazilian tax authorities.

Individual taxation

Residence and domicile

How is residence/domicile determined for tax liability purposes in your jurisdiction?

To be considered an individual resident in Brazil, a foreigner living in Brazil must:

  • hold a permanent visa;
  • hold a temporary visa on the date of arrival in Brazil, and:
    • work under a labour agreement; or
    • reside in Brazil for more than 183 days (not necessarily consecutive) in any given 12-month period; or
  • obtain a permanent visa or labour agreement before the 184th day of residence in Brazil, within a 12-month period.

A Brazilian citizen who was a non-resident, but who has returned to the country with evidence of definitive intention to stay from the date of arrival, will be considered a resident of Brazil.

A Brazilian resident living abroad who has not filed the proper communication of change of residence with the Department of Federal Revenue of Brazil within six months of moving will be considered a resident of Brazil.


Describe the income tax regime in your jurisdiction (including tax base, rates, filing formalities and any exemptions, reliefs or deductions).

All Brazilian taxpayers must file an annual tax return form declaring all income and gains received in the previous tax year, including:

  • prizes;
  • bonds;
  • wages;
  • commissions; and
  • other kinds of remuneration.

The taxable income is broad and includes everything that is directly or indirectly connected with the work or assignment remuneration package (eg, salaries, 13th-month salaries, bonuses, premiums, tips and other gratuities and allowances of any kind). Only a few deductions are admitted, some of which are legally limited.

After considering income, taxes withheld and authorised deductions of expenses, taxpayers verify the actual annual income tax and pay or request reimbursement of the difference from the tax already paid during the previous year.

The rates and deductions are progressive and follow a table that changes according to inflation:

Monthly income

Percentage deducted

Minimum deduction




R1,903.99 to R2,826.65



R2,826.66 to R3,751.05



R3,751.06 to R4,664.68



Above R4,664.68



There are exceptions to the progressive income tax rates, including:

  • capital gains;
  • interest and revenue derived from financial instruments; and
  • income derived from the stock market.

There are a few tax exemptions, including:

  • equipment, clothing, board or transport that is provided free of charge by the employer, or the difference between the amount charged for these items and the market value;
  • reimbursements of relocation costs incurred when moving to a different location at the request of the employer;
  • allowances to cover expenses when working outside the location in which the work is normally performed;
  • indemnities in general, including indemnities for work-related accidents;
  • contributions made by the employer to private social security programmes on behalf of employees;
  • dividends received from a Brazilian entity; and
  • increases of corporate capital in kind.

Capital gains

Describe the capital gains tax regime in your jurisdiction (including tax base, rates, filing formalities and any exemptions, reliefs or deductions).

Capital gains are taxed at a progressive rate of 15% to 22.5%, depending on the total value of the gain. This applies to assets and rights located both in Brazil and abroad.

There are some exemptions (considered on a monthly basis), depending on the asset or right being sold, where the sale price is below certain thresholds.

Earnings that are received by non-residents from real estate rentals located in Brazil are subject to income tax withheld at source at a flat rate of 15%.

For capital gains earned originally in reais, the variation of the exchange rate from the moment of acquisition to the moment of sale will be considered in the calculation of the tax.

In case of capital gains earned originally in foreign currency, the variation of exchange rates will not be considered.

Inheritance and lifetime gifts

Describe the inheritance and gift tax regime in your jurisdiction (including tax base, rates, filing formalities and any exemptions, reliefs or deductions).

Inheritance and donations (ie, gifts) are subject to a state tax – the causa mortis transfer of real estate property tax and donation of any type of property or rights (ITCMD) – with rates that vary between states from 4% to 8%. The tax basis is the market value of the good or right.

The tax must be declared, calculated and payed by the heir or recipient and is due in the following events:

  • at the opening of the succession; and
  • at the act or contract of donation.

Some states have exemptions based on the donation value. Sao Paulo, for instance, exempts the ITCMD for donations with values of up to R64,250 or real estate donations with values of up to R128,500. Other states have different exemption limits or no exemptions in some cases.

Real estate

What taxes apply to individuals’ acquisition and disposal of real estate in your jurisdiction?

Except for donations, real estate transactions are subject to property transfer tax (ITBI). ITBI is charged by the city in which the property is located, with rates varying from city to city (generally 2%). The calculation basis is the value of the real estate transferred.

Non-real estate assets

Do any taxes apply to the acquisition and disposal of other assets apart from real estate?

There is no tax on private transactions of assets, apart from real estate.

Other applicable tax regimes

Are any other direct or indirect tax regimes relevant to individuals?

No. There is only the general tax regime applicable to all individuals.

Planning considerations

Are there any special tax planning considerations for individuals with a link to your jurisdiction?

Private clients in Brazil may set up either domestic or international vehicles such as companies or investment funds for wealth structuring. Holding companies are the most common vehicle used domestically for property planning.

Another option for investments is the exclusive investment fund, which is another domestic structure that private clients often choose as an alternative means of preserving the family heritage.

Individuals are usually taxed only in the event of receiving amounts from the fund, whether in the form of income or capital gains from the sale of quotas. However, when a fund is invested in fixed assets, individuals are taxed on a deemed profit every six months, without any deduction (ie, losses are not deducted from future tax payments).

Even in the wealthiest families in Brazil, it is common for individuals to invest in a specific fund called a free life benefit generating plan (VGBL) as a practical solution in succession issues, since the proceeds from a VGBL are transferred to the appointed beneficiary without any probation or application of succession rules (eg, forced inheritance). VGBLs are offered only by licensed financial institutions.

It is also common for private clients to create funds and companies abroad as vehicles for investing in other jurisdictions, since this kind of structure avoids Brazilian income tax so long as the assets remain outside the Brazilian border.

In addition, those vehicles provide ways to access more sophisticated structures that are not provided by Brazilian law.

Trusts, foundations and charities


Are trusts legally recognised in your jurisdiction? If so, what types are available and most commonly used?

Trusts are not recognised in Brazil, mainly due to its civil law system, whose legislation does not typify the trust structure. It is thus rather difficult to propose such structures to Brazilian individuals who have never had contact with them. Since the incorporation of trusts involves the remittance of proceeds abroad and having a capital structure outside of Brazil, they are used by Brazilian citizens with assets abroad or heirs living in other countries. In general, Brazilians usually prefer using more ordinary structures, such as local companies, or even setting up smaller companies abroad.

What rules and procedures govern the establishment and maintenance of trusts?

If an individual decides to set up a trust structure abroad, all relevant international rules and procedures govern the incorporation and establishment thereto, since Brazilian authorities do not locally recognise trusts. However, Brazilian authorities apply foreign legislation to trust structures, unless it conflicts with Brazilian law regarding forced heirship.

How are trusts taxed in your jurisdiction?

Not applicable. There is no trust legislation in Brazil. Foreign trusts are taxed in Brazil as non-resident entities. Foreign trusts may obtain deferral of taxes in Brazil like foreign vehicles.

Foundations and charities

Are foundations and charities legally recognised in your jurisdiction? If so, what forms can they take?

Yes. Brazil admits two legal forms of not-profit organisation: foundations and associations.

What rules and procedures govern the establishment and maintenance of foundations and charities?

Foundations are legal entities created through an endowment, made public by means of a will or deed for one or more special purposes of public interest, as defined by the Civil Code. Foundations may be created by either governmental entities (and therefore ruled by the public law regime) or private individuals (and therefore ruled by the private law regime). Foundations are governed pursuant to their own bylaws, established according to their founders’ will, and are supervised by the State Prosecutor’s Office. In the case of winding up a foundation, its assets are to be transferred to another foundation with a similar purpose, if not specified otherwise in its bylaws.

Charitable associations are legal entities formed by two or more persons for a non-profit purpose, and are governed by its bylaws, as per Brazilian legislation. In case of winding up of associations, its associates may recover the sums individually invested and the remaining assets must be transferred to another association with a similar purpose, as also happens with foundations.

Both foundations and charitable associations may obtain public titles and recognitions, which grant tax incentives and access to public funds.

How are foundations and charities taxed?

Foundations and charitable associations may qualify for exemption from all taxes. Charitable entities may also be qualified to provide tax benefits for those that contribute to their activities (eg, income tax reductions). Contributions to charities are treated as gifts and are thus subject to gift and inheritance tax. Contributions may be considered as deductible expenses for income tax purposes, although these are limited to certain amounts. However, several requirements should be met to qualify for an exemption or tax benefit. Tax authorities audit the entities to verify permanent compliance with the required conditions.

Compliance issues

Anti-avoidance and anti-abuse provisions

What anti-avoidance and anti-abuse tax provisions apply in the context of private client wealth management?

Brazil does not have a general anti-avoidance rule or anti-abuse provisions regarding taxes. Several tax laws have provisions to prevent avoidance of taxes and abuse by taxpayers. The most common provision is taxation on deemed taxable events.

Anti-money laundering provisions

What anti-money laundering provisions apply in the context of private client wealth management (eg, beneficial ownership registers)?

Brazil’s Anti-money Laundering Law (9,613/98) defines money laundering crimes more broadly than in some other jurisdictions, setting out:

  • the legal and preventive measures;
  • the system for reporting suspicious activities; and
  • the procedures for international cooperation.

The Anti-money Laundering Law obliges individuals and companies to keep internal controls of relevant transactions to clarify the identities of clients and whether the transactions carried out are compatible with clients’ net worth. This is enforced with administrative inspection.

The Anti-money Laundering Law has also created the obligation to report any suspicious information verified by a part in any transaction. All ‘suspicious information’, as determined in the Anti-money Laundering Law, must be reported to the Council for Financial Activities Control (COAF), a financial intelligence unit linked to the Ministry of Finance, which is actively involved in international initiatives related to the prevention of money laundering and financing of terrorism.

There are two types of information that must be notified to the COAF: automatic transactions and suspicious transactions. Banks, accountants, realtors and other service providers should inform the COAF of transactions involving the acquisition of goods or real estate, or cash withdrawals, where the value of the transaction is higher than a certain amount defined by authorities.

The Complementary Law (105/2001) introduced new rules on bank secrecy and extended the access powers of the COAF. In addition, Law 10,701/2003 created a national register of bank accounts and gave even more power to the COAF to obtain information from third parties.

Wills and probate

Succession rules

What rules and restrictions (if any) govern the disposition of and succession to an individual’s property and assets in your jurisdiction?

In Brazil, individuals may dispose of their assets by means of a will or the forced heirship determined by law. Brazilian legislation determines that there is a portion of an individual’s estate that must be divided among specific heirs (ie, the legitimate succession). The legitimate succession determines that the kinships to be considered in the succession line are the descendants, who compete with the surviving spouse (regardless of the marital regime). Subsequently, the next kin in the succession line as per Brazilian legislation are the ascending relatives, who also compete with the spouse (if existent). The collateral relatives are the last kin to be included in the legitimate succession. As per Brazilian law, all such individuals are entitled to at least 50% of the deceased’s assets.

The inheritance is shared between the deceased’s descendants and the spouse according to the number of heirs; the status of the spouse is the same as that of the descendants. All descendants participate in the inheritance – even adopted children and children born out of wedlock. If there are no descendants, the ascendants (ie, the parents) may compete with the surviving spouse for the inheritance. In this case, the surviving spouse may continue to live in the real property owned by the deceased that was used as their daily residency, provided that it is the sole property of such nature. The surviving spouse may benefit from the inheritance only if he or she was not divorced or separated from the deceased. Only if there are no descendants or ascendants may the surviving spouse benefit solely from the legacy. The collateral relatives up to the fourth degree (ie, siblings, aunts and uncles, cousins, great uncles and great aunts) may benefit from an inheritance if there is no surviving spouse, descendant or ascendant. In this case, the closest degree of kinship of collateral relatives excludes the more distant ones (ie, siblings take precedence over aunts and uncles in receiving the legacy).


What rules and procedures govern intestacy?

In case of intestacy, legitimate succession (ie, succession as determined by law) applies in Brazil. Brazilian law determines that there is a portion of an individual’s inheritance that must be divided among his or her legitimate successors. The first individuals to be considered in the succession line are the descendants, who compete with the surviving spouse (depending on the marital regime). Subsequently, the next kin in the succession line are the ascending relatives, who also compete with the spouse (if existent). The collateral relatives are the last kin to be included in the legitimate succession. As per Brazilian law, all such individuals are entitled to at least 50% of the deceased’s assets.

It is important to note that in case of intestacy, the property of the inheritance will be held under the custody and administration of a curator, until the successor is finally determined.

Governing law

What rules and restrictions (if any) apply to the governing law of a will?

In Brazil, every capable and discerning individual over 16 years old may dispose of the totality of his or her assets (or a part thereof) by will, after death. However, the law determines that the legitimate succession’s assets (ie, the portion of an individual’s inheritance that must be divided among his or her successors) must not be included in the will. All will provisions are relevant and applicable, including non-patrimonial ones.

The right to question the validity of a will is extinguished after five years following the date of its registry.


What are the formal and procedural requirements to make a will? Are wills and other estate documents publicly available?

There are three kinds of will in Brazil, depending on the time of drafting:

  • a public will (ie, drafted instantly by the notary);
  • a private will (ie, drafted in closed quarters); and
  • a closed will (ie, drafted in closed quarters and read to the notary).

Public will

In order to be considered legitimate, a public will must be written (manually or mechanically) by a notary or the appropriate legal substitute in the relevant registry, according to the declarations of the author of the inheritance. As soon as the will is drawn, it must be read aloud either by the notary or by the author before two witnesses, who will all execute and initialise the will jointly.

Private will

A private will may be confidentially drawn in writing or digitally and read out loud and executed by at least three witnesses. Once the author is dead, the will shall be made public in court, and the heirs shall be called upon. A private will can be written in a foreign language only if the witnesses understand that language.

Closed will

A closed will is written by the author or a third party at the author’s request, and validated with the notary or the appropriate legal substitute. In this case, the author of the inheritance must deliver the will to the notary before two witnesses, declare the will as his or hers and request its immediate approval. The notary shall immediately draw the approval, reading it out loud before the author and the witnesses, who shall all jointly sign the will. A closed will can be written in a foreign language.

Validity and amendment

How can the validity of a will be challenged? Can the will be amended after the decedent’s death?

In Brazil, the validity of a will may be challenged if:

  • the provision for legitimate succession (ie, the portion of an individual’s inheritance that must be divided among his or her successors) is not complied with; or
  • the author of the inheritance is not deemed capable.

It is also possible to challenge a will because formal requirements were not met.

The will may not be amended after the decedent’s death – otherwise, the succession shall be altered in order to reflect that the deceased heir’s inheritance shall be passed on to his or her descendant.

How is the validity of a will established in your jurisdiction?

In Brazil, the validity of a will may be challenged if:

  • the provision for legitimate succession (ie, the portion of an individual’s inheritance that must be divided among its successors) is not complied with; or
  • the author of the inheritance is not deemed capable.

To what extent are foreign wills recognised? Do any special rules and procedures apply to establishing their validity in your jurisdiction?

Foreign wills are recognised by Brazilian law as long as they respect the legitimate succession provision of Brazilian law (ie, the portion of an individual’s inheritance that must be divided among the decedent’s successors). Further, foreign wills must take one of the three forms available under local law:

  • public (ie, drafted instantly by the consular authority, rather than the notary public);
  • private (ie, drafted in closed quarters, independent from the consular authority’s approval); or
  • closed (ie, drafted in closed quarters and read to the consular authority).

Estate administration

What rules and procedures govern:

(a) The appointment of estate administrators?

The distribution of assets and appointment of estate administrators may be judicial or extrajudicial. The distribution may take place before a public notary if:

  • the heirs are consenting regarding the distribution of assets;
  • the heirs are not minors or incapable; and
  • the deceased has not left a valid will.

In this case there is no need for an estate administrator.

In all other cases, a judge whose jurisdiction covers the main residence of the estate will be responsible for appointing potential estate administrators, who then become fully responsible for duly and faithfully conducting the succession, on oath. The appointment is made according to the following order:

  • the surviving spouse or partner;
  • the heirs;
  • the devisee;
  • the executor;
  • the assignee of the heir or devisee;
  • the creditor of the heir, of the devisee or the decedent;
  • the Public Prosecutor’s Office, if there are incompetent heirs;
  • the tax authority, in case of relevant interest thereof; and
  • the bankruptcy trustee of:
    • the heir;
    • the devisee;
    • the decedent; or
    • the surviving spouse or partner.

(b) Consolidation and administration of the estate?

Twenty days after being appointed, the estate administrator will make the first statements, containing a full profile of the decedent and the heirs, as well as a complete list of the estate and its value.

The judge will then serve the process, for the purpose of the terms of the probate process, distribution and notification of the tax authorities. The heirs, admitted or pretermitted, may then:

  • file statements and claims;
  • allege errors, omissions and concealment of assets;
  • object to the appointment of the administrator; or
  • contest the capacity of those included as heirs.

At the end of this procedure, the judge will appoint an expert to appraise the assets of the estate, which may also be contested.

Before the distribution, the creditors of the estate may apply to the probate court for the settlement of overdue and enforceable debts.

(c) Distribution of the estate to heirs?

If the distribution is judicial, the heirs may file a claim to divide the estate. Assets that cannot be divided shall either be bided between interested parties or judicially sold, unless agreed otherwise by all heirs. The devisee then makes a draft of the distribution, against which the heirs may file claims. Once the draft is resolved, the devisee must pay estate taxes. Then the judge will render judgment on the distribution.

If the distribution is extrajudicial, the division of assets to heirs will be made pursuant to a deed of distribution registered before a notary.

(d) Settlement of the decedent’s debts and payment of any taxes and fees?

The Civil Code governs the settlement of the decedent’s debts and the payment of taxes and fees. These are paid up to the limit of the amount of inheritance.

Planning considerations

Are there any special considerations specific to your jurisdiction that individuals should bear in mind during succession planning?

There are discussions in Brazil about raising the rate of gift and inheritance tax. Currently, the rate varies from 4% to 8%, depending on the state. To prevent being affected by any future rise in taxes, individuals may consider gifting their inheritance to their successors now, thus taking advantage of the present rates.

Capacity and power of attorney

Loss of capacity

What rules, restrictions and procedures govern the management of an individual’s affairs where he or she loses capacity and the grant of power of attorney in such cases?

If an individual is not deemed capable of deciding on his or her succession, the judge will first appoint a curator in order to manage the incapable individual’s assets and decide on their distribution. The curator has the power to represent the author of the inheritance before courts and third parties in this regard. In the case of incapability, the grant of a power of attorney is not allowed – only a judicially appointed curator can decide on succession (provided that the minimal legal requirements are respected, on death).


What rules, restrictions and procedures govern the holding and management of a minor’s assets until the minor reaches the age of capacity?

A minor’s assets are held and managed by the parents or, if the parents are absent or deceased, by a guardian appointed by a judge.

The parents or guardian assume the legal commitment to care for the rights and guarantees of the child under guardianship (eg, promoting education, health, housing and recreation). It is up to the parents or guardian to administer the child’s assets until the child comes of age. Nevertheless, disposition of assets will depend on judicial authorisation.

Family links

Marriage and civil partnerships

What matrimonial property regimes are recognised in your jurisdiction?

Brazil has four matrimonial property regimes:

  • partial property marriage;
  • community property marriage;
  • separate property marriage; and
  • partnership of acquests.

Partial property marriage

The partial property marriage, which is the standard regime, encompasses the assets and debts acquired during the marriage, except:

  • assets pertaining to the partner before the marriage or obtained by the partner through donation or inheritance;
  • assets acquired by a partner with private resources;
  • obligations prior to the marriage or resulting from illegal actions;
  • personal items, books and professional tools;
  • the proceeds of labour of each partner; and
  • pensions.

Community property marriage

The community property marriage encompasses all assets and debts of the couple, except:

  • assets obtained through donation or inheritance, with an incommunicability clause;
  • assets encumbered by fideicomisso (ie, a civil law institution close to a trust in the common law) and the rights over property of third parties due to fideicomisso;
  • debts acquired prior to the marriage, if not for the profit of both partners;
  • prenuptial donations of one partner to the other, with an incommunicability clause;
  • personal items, books and professional tools;
  • proceeds of labour of each partner; and
  • pensions.

Separate property marriage

In the separate property marriage, each partner has his or her own separate estate and these are separately administered.

Partnership of acquests

Known as a “participação final nos aquestos”, this regime is very similar to the partial property marriage. The main difference is that the common estate of the partners includes only the assets acquired onerously by the couple, while the estate of each partner is administered in a totally independent manner. The adoption of this regime is very rare in Brazil.

Are same-sex marriages and/or civil partnerships recognised in your jurisdiction?



Is there a legal distinction between legitimate and illegitimate children in terms of estate and succession planning?

No. Pursuant to the Federal Constitution, there is no distinction between legitimate and illegitimate children.

Is there a legal distinction between natural and adopted children in terms of estate and succession planning?

No. Pursuant to the Federal Constitution, there is no distinction between natural and adopted children.