A very common question that usually arises concerns the dividend tax by those who own a company abroad.
More and more Brazilians want to expand their companies in Brazil or start a new business abroad, in this way they manage to profit in dollars, which is a great way to have an excellent income.
But in the midst of this, there is a question: how is the tax on corporate profits? And how to send this money to Brazil?
What about the tax to be paid on dividends that are sent from abroad to Brazil? How much will the entrepreneur need to pay in this case?
Knowing this value is very important for any entrepreneur, after all, he needs to know what the impact will be on the dividends to be received by his company.
By the way, the tax issue is always a huge concern for anyone who wants to invest with a company abroad, as no one wants to pay a lot of tax to send the money to their account in Brazil.
Thinking about all this, we will answer this question: if someone, an individual, who owns a company abroad decides to send dividends to the company's account in Brazil, how much will he pay in tax?
If you want to know the answer to this question, be sure to follow this text until the end!
Who must pay US tax?
There is a point of great importance to be discussed before talking about sending dividends from a company in the United States to an account in Brazil.
It's about how paying taxes in the US works, after all, anyone who owns a company in the country also needs to be concerned.
The income tax return in the United States is, as the name implies, the rendering of accounts that a person must make before the Federal Revenue agency.
In this way, it is necessary to prove everything that was earned and spent over the 12-month period.
It is very important to keep this in mind so that you can file your IR and avoid problems with the US tax authorities.
There are some things that make the US different from Brazil in the payment of income tax, such as the fact that part of the collection is paid by the states, which have their own legislation.
For example, Florida is a state that receives a large number of tourists throughout the year, which is why individuals in this state are exempt from paying the tax, but companies are obliged to.
Companies, by the way, need to pay all fees referring to income tax always before the 1st day of the 4th month (April) following the closing day of the fiscal year, which occurs on 12/31, with the exception of extension.
US personal and corporate income tax
In the USA, as in Brazil, there are differences between the payment of income tax for individuals and companies.
The payment process is usually much simpler than in our country, but it still raises many questions.
The deadline for submitting the income tax for individuals is always April 15 of the year following the base year of the declaration.
Taxpayers who, for whatever reason, are unable to deliver their declaration by the deadline, may then fill out a form to make an extension request, provided they inform the reason for postponing the payment.
For companies, as previously mentioned, the deadline is April 1st, which is the fourth month after the end of the fiscal year, which occurs on 12/31.
The best way to pay income tax in the US is to rely on a specialized company, such as America Expert.
Taxation of taxes on profits and dividends received by the company domiciled abroad
There is a provision that all profits and dividends received from a company domiciled abroad are obligatorily taxed each month, regardless of whether they are transferred to Brazil or not.
In addition to the Carnê-Leão, which obliges you to collect these amounts monthly, there is still a need to make the adjustment within the annual income statement.
This, of course, always observing all agreements, treaties and international conventions that are signed between the Brazilian government and the country from which your income originates, or even the reciprocity of treatment.
In the case of income tax that is paid in a country in which there is an agreement, treaty or convention with Brazil, which provides for compensation, or that has reciprocal treatment, there is a reduction in the tax to be paid in Brazil.
Of course, as long as that same tax has not been compensated or refunded in the foreign country.
All the tax that is paid in the country of origin of the income can be compensated within the calculation of the amount that needs to be collected monthly in the carnet-leão and also in the income tax return.
This amount to be offset will have as a limit the amount that corresponds to the existing difference between the tax that was calculated together with the inclusion of income that comes from a source from abroad.
It is also important to note that any tax paid abroad must be converted into US dollars at the amount set by the monetary authority of the country where the payment was made.
This considering the date on which the payment was made and then converted into real, based on the value of the US dollar that is set for purchase by the Brazilian Central Bank itself.
The value must be the one established by the BC on the last business day referring to the 1st fortnight of the month prior to the receipt of this income.
Finally, the taxpayer must always arrange for the document to be translated into Portuguese by a sworn translator, taking into account the content of all proof of income and the tax paid.
Thus, this tax can be offset within the Taxpayer's Annual Adjustment Declaration in Brazil.
The tax on dividends of a company located abroad
Regarding the distribution of profits and dividends abroad, whenever it is sent to Brazil it needs to be taxed according to a progressive income tax table.
When this amount is received here in Brazil, it is necessary to apply the taxation that is calculated according to the Carnê-Leão program, which belongs to the Federal Revenue Service.
The rates referring to taxation vary greatly, ranging from 7.5% to 27.5%, everything will depend on what is the range of the value of dividends or profits from abroad.
And how is this annual progressive table of income tax taxation?
The table considers the value in reais (R$) as the calculation base, the rate in %, and the portion that will be paid for the income tax deduction is as follows, according to each bracket:
- Dividend value of up to R$20,529.36 – Tax payment is exempt;
- Value of dividends from R$20,529.37 to R$30,766.92 – Rate of 7.5% – value of the portion to be deducted: R$1,539.70;
- Value of dividends from R$30,766.93 to R$41,023.08 – Rate of 15% – Value of the portion to be deducted: R$3,847.22;
- Value of dividends from R$41,023.09 to R$51,259.08 - Rate of 22.5% - Value of the portion to be deducted: R$6,923.95
- Amount of dividends above R$51,259.08 - Rate of 27.5% - Amount of portion to be deducted: R$9,486.91
In addition to this, there is also another table, which is the Monthly Progressive Tax Payment Table.
Below, you will see the value of the calculation base in reais (R$), the rate in % and the portion to be deducted from the tax in reais (R$) as well:
- Amount of dividends up to R$1,710.78 – Exemption from payment of income tax;
- Value of dividends from R$1,710.79 to R$2,563.91 – Rate of 7.5% – Value of the portion to be deducted: R$128.31;
- Value of dividends from R$2,563.92 to R$3,418.59 – Rate of 15% – Value of the installment to be deducted: R$320.60;
- Value of dividends from R$3,418.60 to R$4,271.59 – Rate of 22.5% – Value of the portion to be deducted: R$577.00;
- Dividend value above R$4,271.59 – Rate of 27.5% – Rate of R$790.58.
Conclusion
As you have seen, knowing about the incidence of tax on the dividends of a company abroad sent to Brazil is essential, so that the entrepreneur can prepare and organize himself financially.
In this text, you could learn a little more about the subject and even understand more about the rates that apply to each of the calculation bases.
