We have experienced in recent years a large flow of movement of Brazilian families migrating to live, invest and work in the US, especially in Florida. Unlike previous movements, these families, are mostly families of entrepreneurs who own businesses, real estate and investments in Brazil and now start to focus on the US as a new place for investments.
However, what we found about these families is the widespread lack of knowledge about the fiscal consequences resulting from the decision of immigrate and / or living in the US. Most of these families are unaware that the stay or change of residence from Brazil to the US generates significant impacts that ran not be disregarded.
Take as a starting point of our analysis regarding those Brazilian families who have not yet made the decision to immigrate to the US, but only come to spend a season, often having already acquired a residence for summer, especially in Florida.
In this case, armed with American tourists visas (“B2″ class), they spend several weeks and even months of the year on American soil, imagining they are immune to the tax effects in the United States. However, for tax purposes, one of the fundamental principles of American Tax Laws is the “substantial presence test”. The imposition of US tax residency for those who remain in US territory for more than 183 days per year over a period of 3 years. In such a reality, any foreign citizen (“non-resident alien”) who remains in US territory for a period of time, acquires the American tax residence, being forced to pay taxes to ”Uncle Sam”.
The “substantial presence test” is the day count in American territory as follows: (a) current year: we consider the whole of the day on American soil; (b) the previous year: to include 1/3 days on American soil; and (c) the year before the previous one: count is 1/6 days on American soil. Thus, if the sum of the days in three years is not less than 183 days, the foreign citizen is obliged to the payment of taxes in the United States as a US resident.
Therefore, failing to acknowledge that important fact can have serious taxes consequences, as both the US and Brazil, have the basic principle of their income taxation system, the principle of universality (“worldwide system”), yet, the resident must pay taxes on their worldwide income.
Regarding the other temporary stay visa 031 / business, Li executive, E2 / investor treated, etc.) and permanent (EB5 / investor, EB1 / executive or extraordinary ability, etc), the tax effects are quite abhorrent because in all these cases the citizen will be considered a US tax resident, with the obligation of the US tax collection.
The only exception is the student visa (F1), which is not subject to “substantial presence test” and does not result in the imposition of US tax residence.
Thus, it is important fiscal analysis when the stay or immigration to the US. As we have seen, based on the “worldwide tax” system, the event of adoption or imposition of US tax residence, all proceeds, fruits and values in Brazil, such as dividends, interest, rents and others, should be taxed in the US.
Regarding the Brazilian reality, there are also very serious tax consequences. For Brazilian tax law, the individual or legal entity resident or domiciled in Brazil are also required to obey the “worldwide tax system”, and any Income received in Marti or abroad shall be taxed by the income tax in Brazil.
If the individual resident in Marti opts for the American tax residence (through visa EB5, E2, L1, rel, etc.), under Brazilian law, must present the Final Departure Statement of the Country (“DSDP”) from the release date until the last day of February of the following calendar year. Otherwise, the individual will be subject to double taxation by the Brazilian tax authorities and the US tax authorities, as is the Brazilian tax resident status and at the same time, the US fiscal resident.
For legal investors, entrepreneurs overseas, especially those involved in obtaining visas for executives in the US (L1 visas), it is essential to emphasize that the creation of a subsidiary company outside the company is forced to payment of Income tax in Brazil by the system of real profit.
Therefore, it was verified that a detailed analysis in the reality of each family interested in temporary or permanent residency In the US Is cot ical. Through the “pre-immigration planning alternatives and viable legal structures are studied to read that dividend Income, rents, financial income and others are not subjected to double taxation.
So again It is important to note that the change from Brazil to the US has important and relevant taxes consequences that need to be analyzed and studied with the advice of qualified professionals in Brazil and the US.
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