A Q&A guide to private client law in Brazil. The Q&A gives a high level overview of tax; tax residence; inheritance tax; buying property; wills and estate management; succession regimes; intestacy; trusts; co-ownership; familial relationships; minority and capacity, and proposals for reform.
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This Q&A is part of the PLC multi-jurisdictional guide to private client law. For a full list of jurisdictional Q&As visit www.practicallaw.com/privateclient-mjg.
The tax year is generally the calendar year.
Individual income tax is paid monthly (current basis taxation), as follows:
All income received from companies is subject to withholding tax.
Income received from other individuals from foreign sources is subject to compulsory monthly payment (Carnêleão), which is due on the last business day of the month following the earning of the income.
The concept of domicile does not, by itself, determine tax liability in Brazil (see below, Residence).
Generally, a Brazilian national is tax resident in Brazil if either:
He is legally domiciled in Brazil.
If not domiciled in Brazil, he elects to be treated as a resident for tax purposes.
Whether a foreign national is treated as a resident for tax purposes depends on the type of the visa held by him:
Foreign nationals holding a permanent visa are treated as residents for tax purposes, as of their arrival.
Foreign nationals holding a temporary visa (generally valid for two years) are treated as resident for tax purposes (as of their arrival) if coming to Brazil to work as an employee. However, if a foreign national comes to work on the basis of a technical assistance agreement, and on behalf of a foreign company, he is considered a non-resident provided that he does not stay in Brazil for more than 183 days within a 12-month period.
Non-residents are subject to Brazilian income tax only on the income received from Brazilian sources.
Brazilian residents are subject to Brazilian income tax on their worldwide income, at progressive rates.
There is no exit tax in Brazil. However, when a Brazilian resident ceases to be a resident by virtue of exit of the country, he must file an exit income tax return and pay any taxes due (Declaração de Saída).
An individual residing or domiciled in Brazil who transfers his residence to a low-tax jurisdiction or to a country or dependency with a privileged tax regime (see Question 5) continues to be considered a Brazilian tax resident, unless he proves residence in a low-tax jurisdiction or demonstrates that, under the law of a foreign jurisdiction he is subject to local income tax on the totality of his earnings arising from labour and capital (Law No. 12,249/10). The individual must also present their relevant income tax forms.
There are no specific tax rules affecting temporary residents.
Capital gains derived from the sale of real estate and other assets are taxed separately. Payment of the income tax on capital gains is due in the month following that in which the gain was earned.
Capital gains derived by non-residents from Brazilian sources are subject to the 15% withholding tax. This rate may be reduced if a tax treaty is applicable.
There is a special tax treatment for capital gains arising from foreign investments in Brazil earned in financial transactions carried out on stock, merchandise, futures and related exchanges (such as the São Paulo Stock Exchange (BOVESPA), Mercantile & Futures Exchange (BM&F) and the Brazilian organised over-the-counter market (SOMA)). The special treatment includes an exemption from capital gains tax on certain financial transactions and reduced withholding rates for other types of income, including investments in fixed and/or variable income securities. To receive the special tax treatment, the foreign investor must reside or be domiciled in a jurisdiction which is not a low-tax jurisdiction.
Capital gains made by a non-resident who is resident or domiciled in a low-tax jurisdiction is subject to a 25% withholding tax.
Low-tax jurisdictions are those which do not tax income, or which apply a maximum rate of tax below 20%. Countries whose legislation does not allow access to information relating to the corporate structure of legal entities, legal ownership or the identity of actual beneficiaries of income attributable to non-residents are also considered as low-tax jurisdictions.
On 7 June 2010 the Official Gazette published Normative Ruling of the Federal Revenue Department nº 1,037 (IN 1,037/10), which approves the new list of low-tax jurisdictions and privileged tax regimes. For example, the following are considered low-tax jurisdictions:
Brunei.
Costa Rica.
Cyprus.
United Arab Emirates.
Monaco.
Saint Kitts and Nevis.
British Virgin Islands.
The privileged tax regimes are, for example:
In relation to Denmark, the regime applicable to holding companies that do not carry substantive economic activities.
In relation to Iceland, the regime applicable to legal entities incorporated as international trading companies (ITC).
In relation to the US, the regime applicable to the state limited liability companies (LLC), whose corporate ownership is composed of non-residents not subject to the federal income tax.
The concept of privileged tax regime should not affect the list of jurisdictions which are currently subject to the 25% withholding income tax on remittances to non-residents of interest on loans, interest on equity, royalties for transfer of technology or technical services, among others.
Currently, the concept of privileged tax regime is only linked to the transfer pricing legislation and to the new thin capitalisation and deductibility rules that are provided by Law No. 12,249/10, and regulated by IN 1,154/11. Even though there may be a future extension of the concept of privileged tax regime to other situations, there are good arguments to assume that companies that operate under a privileged tax regime, but that are not domiciled in a low-tax jurisdiction should not be subject to any penalty of higher rates, except with respect to the transfer pricing rules, thin capitalisation and deductibility rules. The Brazilian Federal Revenue Department has confirmed that the 15% withholding income tax applies on interest payments to a foreign entity operating under a privileged tax regime.
Brazilian source income from salaries and wages is subject to the standard 25% withholding income tax. This taxation may be reduced if a tax treaty is applicable.
Brazilian source investment income is also subject to withholding income tax. However, special tax treatment applies to income arising from foreign investments in Brazil earned in financial transactions (see Question 5). Earnings, other than capital gains, are taxed as follows:
At the rate of 10%, when involving foreign investments in variable income funds, swap transactions, and transactions carried out on futures settlement markets.
At the rate of 15%, in other cases, including fixed-rate income investments and shares (juros sobre o capital próprio).
Furthermore, zero-rated income tax applies to earnings paid to foreign investors not resident in a low-tax jurisdiction related to the acquisition of public bonds (Law No. 11,312/06). The exemption applies to the public bonds acquired after 16 February 2006.
As part of the low-tax jurisdiction avoidance rules enacted in 2000, the beneficial tax treatment generally applicable to non-resident investors does not apply to foreign investors residing or domiciled in low-tax jurisdictions.
Law No. 11.033/04 provides for taxation of the income related to the financial and capital market. Withholding tax applies to the income earned by residents of Brazil and residents of low-tax jurisdictions deriving from financial investments in fixed and variable income instruments, including swap transactions. The tax rates decrease according to the period for which the investment is maintained in the respective fund:
Up to 180 days: 22.5%.
From 181 to 360 days: 20%.
From 360 to 720 days: 17.5%.
More than 720 days: 15%.
Although Brazil does not have a gift tax as such, the following taxes are relevant on transfers of assets. The incidence of one tax excludes the application of the other.
A transfer of Brazilian real estate triggers the municipal tax. The ITBI applies irrespective of whether the transfer is for consideration or not. Generally, a mere change of the ownership triggers the ITBI.
The gratuitous transfer of movable or immovable assets by reason of death, or donation, is subject to state tax. The application of the ITCMD should be reviewed on a case-by-case basis depending on the settlor's domicile, the beneficiary's domicile and location of the assets. For immovable assets, the ITCMD applies only if the asset is located in one of the Brazilian states.
As the ITBI is a municipal tax and the ITCMD is a state tax, applicable rules, rates and tax base may be different in each Brazilian municipality and state. The Brazilian Senate determined the maximum ITBI and ITCMD rates to be applied by the municipalities and states respectively. Currently, the maximum ITCMD rate is 8%, and the maximum ITBI rate is 4%.
Tax free allowances may be available but vary in accordance with municipal and state legislation.
The ITBI is not due:
On a transfer of real estate destined for the payment of subscribed capital on the company's incorporation (National Tax Code).
When the transfer is due to a merger of companies. However, this exemption does not apply if the acquiring company performs economic activities mainly related to letting real estate or to the transfer of rights related to the acquisition of such real estate.
Other ITBI and ITCMD exemptions may be established by municipal or state legislation.
Several planning techniques may be considered in the context of succession and asset optimisation. Clients may want to consider alternative techniques to the adoption of a will to pass wealth to the heirs, such as:
Grants of civil law estates.
Liens.
Remainders.
Tenancies.
Future interests, with the possibility of retaining title and providing for springing or shifting interests and entitlements to heirs or legatees.
An investment in surrender life insurance (Vida Gerador de Benefício Livre) (VGBL) or a similar pension product (Plano Gerador de Benefício Livre) (PGBL). This an attractive option as it avoids the ITCMD. However, depending on the type of product chosen, consideration should be given to the income tax liability associated with investment gains on the policy or upon its surrender.
One simple method of planning estate and wealth succession is to set up a holding company and transfer assets to the company. The spouse and children have an equity interest in the holding company, and investments and real property form the capital of the holding company. Taxes may be reduced and wealth can be transferred efficiently through dividend distributions, which are tax exempt.
Other creative methods and alternatives may be developed by bundling several insurance and pension products, corporate and civil law vehicles, with the granting of security interests aimed at preserving the wealth and its accumulation.
A transfer of property inter vivos (that is, in the donor's lifetime) through donation may entail a higher degree of control than a transfer on death.
One of the expected tax changes in Brazil relates to a possible increase of the current rates of inheritance tax. This tax may become progressive at higher rates in the near future. Therefore, transfer of property in life through donation may represent efficient tax planning if implemented before the change in laws.
Some precautionary actions are advisable. For example, the individual should reserve for himself the life usufruct (that is, the right of enjoyment) over the transferred asset, so that although the title and ownership passes to the heirs, any income deriving from the asset (for example, rents) and decisions over the company's business ultimately lie with the individual holding the usufruct.
Other precautionary measures that may be taken are the customary clauses of non-conveyance (inalienabilidade), non-communicability (incomunicabilidade) and non-attachment (impenhorabilidade) of the property, which are intended to ensure that the ownership of the property continues to belong to the designated heir and is not dissipated or transferred to undesired parties.
Generally, the regime applies to foreign owners, but this may vary according to the municipal and state legislation.
There are no other taxes on death or on lifetime gifts.
There are no purchase and gift taxes.
There are no wealth taxes.
A potentially tax-advantageous real estate holding structure is investing through a Real Estate Investment Fund (Fundos de Investimento Imobiliário) (FII). However, the tax benefits vary in accordance with the number of unrelated investors and the proportion of interest held by each investor.
Brazilian residents are subject to Brazilian income tax on their worldwide income, at progressive rates varying from 0% to 27.5%.
Capital gains derived from the sale of real estate and other assets are taxed separately at the rate of 15%. The following are exempt from capital gains tax:
Sale of assets worth up to BRL35,000.
Sale of shares worth up to BRL20,000 negotiated in the over-the-counter market (mercado de balcão).
Capital gains on the sale of assets located outside Brazil, provided that such assets were acquired when the seller was a non-resident.
Brazil is party to 29 double tax treaties (that are in force), for example, with Argentina, Austria, Canada, China, France, Japan, The Netherlands and South Africa. The tax treaties with Paraguay and Venezuela are yet to be ratified.
An owner of assets in Brazil does not have to make a will in Brazil. However, if an owner of real property located in Brazil decides to make a will in another country, the validity of the will is subject to compliance with the requirements set out in the law of the place where the will is made (lex loci actus).
In relation to the enforcement of a will made outside Brazil, two points are noteworthy:
The terms of the foreign will are analysed according to Brazilian law if the testator was domiciled in Brazil at the time of death and, where Brazilian rules are violated, the clause may be held null and void (lex domicilii).
If the testator was not domiciled in Brazil, but has assets located in Brazil, Brazilian law must be observed to the benefit of the Brazilian-resident spouse or children, unless the foreign law is more favourable to them.
Under Brazilian law, wills are divided into two major categories:
Ordinary wills (Testamentos Ordinários), which include:
public will;
closed will; and
private will.
Special wills (Testamentos Extraordinários), which comprise:
maritime will;
airborne will; and
military will.
In addition, there is another form of testamentary pact, namely codicil (codicilos), also recognised in the legal systems of other countries.
The formalities do not depend on the nationality, residence and/or domicile of the testator.
Any capable individual (including minors above 16 years old) may dispose, through will, of all, or part of, his assets, to the extent it does not contradict the forced heirship rules.
This type of will must be drafted by a registrar's head official (tabelião) or deputy clerk having full faith and credit, and recorded in the proper registry book, according to the declarations of the testator, after the draft will has been:
Read out loud by the registrar official or by the testator to the others and to the attending witnesses, which must be at least two.
Signed by the testator, the notary official and the witnesses.
The public will can be typed or handwritten.
A closed will must be initially drafted by the testator (or by someone else on his behalf) and signed by him.
To be valid, the will must be approved by a registrar official with the following formalities being met:
The will must be delivered by the testator to the official in the presence of two witnesses.
The testator must declare that he acknowledges such will as his and requests its approval.
Promptly after the terms of the will, the official must draft its "term of approval" in the presence of the two witnesses and read this to the testator.
The "term of approval" is subscribed by the official, the two witnesses and the testator.
Private wills are those drafted (whether handwritten or typed) by the testator in the presence of three witnesses and signed by the testator and the witnesses.
The beneficiaries cannot make a post-death variation. The testator is the only person with the right to change his will. However, once the inheritance is transferred to the legal or testamentary heirs, they can dispose of the property received provided the Civil Code rules are observed.
In addition, although the heirs cannot modify the testamentary dispositions, they can renounce the inheritance and their portion will be added to the portion of the same class of heirs.
See Question 15.
Foreign grants of probate are not enforceable in Brazil. If a foreign will needs to be enforced in Brazil, the Brazilian court will appoint an executor, who must receive from the court an official document to administer the estate.
Foreign nationals are treated in the same way as Brazilian nationals in terms of estate administration.
See Question 15.
If the deceased person has made a will and appointed an executor, the administration of the estate is the executor's responsibility. If no executor has been appointed, enforcement of the will and administration of the estate is carried out by the deceased's spouse and children or a third party appointed by the judge.
If the deceased person has made no will, the judge appoints as executor the deceased's spouse, the heirs or a third party.
An executor can do the following, after hearing the heirs and with the authorisation of the judge (Article 922, Civil Procedure Code):
Sell the deceased's assets.
Enter into agreements.
Pay debts of the deceased.
Incur the expenses necessary for the conservation and the improvement of the deceased's estate.
The estate vests in the executor, if there is one, or in the heirs.
Establishing title and gathering in assets (including any particular considerations for non-resident executors)?
Paying taxes?
Distributing?
An executor must present a list of assets comprising the estate within 20 days from the date of his appointment (Article 993, Civil Procedure Code).
If doubt arises over the inclusion or exclusion of a particular asset, the matter is decided by the judge, after hearing the involved parties. The judgment issued safeguards the rights of third parties.
As IHT is a state tax, the procedure for paying the tax differs by state. For example, in São Paulo IHT is payable within 30 days following the judicial decision about the assets' division among heirs and their value.
After the executor presents a list of assets comprising the estate, the judge appoints an expert to present a draft of the distribution of the assets.
The draft prepared by the expert does the following:
Divides the assets in accordance with the provisions of the applicable law.
Prevents non-division or the excessive division of the assets.
Presents the proposal to the beneficiaries, which should include the evaluation of the assets and their division among the heirs.
To be considered final, all heirs must agree to the distribution of the assets proposed by the expert. If an agreement cannot be reached, the court must determine the final division of the assets.
There are no special time limits/restrictions/valuation issues that are relevant to an estate with an element in another jurisdiction.
A beneficiary can challenge the validity of a will on the following grounds (Article 1900, Civil Procedure Code):
Coercion of a testator resulting in the substitution of another person's desires for those of the testator.
Benefits provided to an ill-defined person.
The heir or other third parties determines under the will the value of the inheritance.
The will favours the person that wrote the will, the witnesses of the will, the extra-marital partner of the deceased, the notary public or the party who approves the will.
The right to challenge the validity of a will expires after five years from the date of the registration of the will.
The executor will be removed if he (Article 995, Civil Procedure Code):
Does not present in court, on time, the statement of the assets of the deceased on the date of death and the statement of the disposition of those assets.
Does not proceed with probate proceedings.
Causes any damage to the deceased's assets by negligence.
Does not represent the deceased in a lawsuit filed against him.
Does not account to the heirs.
Divests or hides the deceased's assets.
The succession regime depends on the law of the jurisdiction where the deceased individual was domiciled at the time of his death, irrespective of the status and nature of the assets (Conflict of Laws Statute). Succession to assets of a foreign national located in Brazil are regulated by Brazilian law unless Brazilian law proves to be less beneficial to the heir(s). The law of the heir's or assignee's domicile regulates the heirs' capacity to inherit.
The forced heirship rules depend on the applicable marital property regime of the deceased person. There are currently four types of marital property regimes (Civil Code):
Partial communion of assets. This is the default marital property regime in Brazil. Under this marital property regime, only the assets acquired by the spouses after their marriage form the marital property.
Total communion of assets. The assets acquired by both spouses before and after the marriage (except for assets inherited or acquired by donation by either spouse) form the marital property.
Separation of assets. None of the assets acquired before or after the marriage form the marital property. This type of marital property regime is mandatory for individuals over 60 years old or who require court authorisation to marry (for example, young persons requiring parental consent).
Participation in acquêts. The participation in acquêts (acquired estate) is similar to the partial communion regime, except that the property acquired during the marriage belongs to the spouse who acquired it but such property is shared in case of divorce. This new regime gives autonomy to each spouse to manage his property independently during the marriage.
When one spouse dies, the other spouse is entitled to:
Half of the deceased spouse's assets acquired after the marriage, under the partial communion of assets regime and the participation in acquêts regime.
Half of the deceased spouse's assets acquired before and after the marriage, under the total communion of assets regime.
This entitlement is called meação.
The portion of the deceased person's property subject to forced heirship rules (legítima) comprises:
One-half of the deceased's assets not comprising meação.
Assets acquired by the deceased before his marriage or donated to him, and the assets inherited, minus the funeral expenses and the deceased's debts.
Therefore, generally only 25% of the deceased's property may be administered by will.
The legitima is shared by the forced heirs. Until recently, the forced heirs were limited to deceased's ascendants and descendents. The Civil Code granted to spouses and civil partners (see Question 39, Civil partnership) the status of forced heir.
The forced heirship participation in the legítima is subject to the following order of priority:
The descendents and the surviving spouse, except if the deceased was married under the total communion of assets regime or the total separation of assets regime; or under the partial communion of assets regime if the deceased person did not leave particular assets (assets acquired by the deceased before marriage).
If there are no descendents, the ascendants and the surviving spouse.
If there are no descendants, ascendants, the surviving spouse.
If there are no descendants, ascendants, or the surviving spouse, the collaterals (that is, relatives up to 4th degree).
If the deceased person does not have any forced heirs, 100% of the deceased's property can be disposed of by will.
If there is no will, the local (municipal) government where the assets are located (or the federal government, if the assets are located in a federal territory) inherits all of the deceased's assets.
Generally, the laws of Brazil do not allow inter vivos arrangements to alter forced heirship rules. However, the Civil Code allows:
Inter vivos donations of someone's assets made as a gift to one or more of his heirs. This type of donation does not diminish the legitima portion as it is considered as anticipatory disposition.
Mortis causa (upon death) donations provided for under a prenuptial agreement, on the condition that in no event can someone dispose of the assets comprising the legitima of the forced heirs.
Forced heirs may be disinherited under certain extraordinary circumstances stated in the Civil Code (for example, when the father is murdered by his son).
These are treated in the same way as assets received in Brazil.
The forced heirship rights are mandatory on the forced heir. He cannot agree to a different distribution during the testator's lifetime.
In relation to the applicable substantive law, the Conflict of Laws Statute provides that the succession is governed by the law of the country in which the deceased was domiciled (at the time of his death), irrespective of the status and nature of the estate's assets (Article 10). Under the Civil Code, the domicile is the place where the person is physically present, and that the person regards as a true, fixed, principal and permanent home (Article 70).
In relation to the procedural law, if the assets of the deceased are located in Brazil, only Brazilian courts have jurisdiction to hear and adjudicate probate proceedings (Article 89, II, Civil Procedure Code).
Therefore, if someone is domiciled abroad and has assets in Brazil at the time of the death, the Brazilian courts have jurisdiction over the probate proceedings (with regard to the local assets) and foreign substantive law must be observed by the Brazilian judge. If the person has assets in different countries, local legislation must be reviewed and considered regarding succession by death.
The Brazilian courts accept the doctrine of renvoi in relation to succession of immovable property.
Forced heirship rules apply (see Questions 24 and 25).
It is not possible for beneficiaries to challenge the adequacy of their provision under the intestacy rules.
Brazilian domestic law does not include a law on trusts. Therefore, there are no domestic rules on the taxation of trusts and the trustees, settlers, and beneficiaries.
Under the Conflict of Laws Statute, the law where the party is domiciled must govern its legal capacity (Article 7). Therefore, if a trust is recognised in the jurisdiction in which it is situated, then the Brazilian tax authorities should respect its characterisation under its governing law. Although there is no specific court precedent in this regard, this understanding is supported by some Brazilian scholars. However, Brazilian law is unclear on the characterisation of trusts and it is recommended that legal advice be sought in the individual case.
Income tax. From an income tax perspective, a foreign trust should be treated as a non-resident trust. Therefore, income generated by the trust is taxed in Brazil to the extent it derives from a Brazilian source. The specific tax burden depends on the nature of the income. The Brazilian withholding tax system is based on source of payment. Therefore, income paid by a resident in Brazil to a foreign resident is generally subject to local withholding tax (increased withholding tax rates and stricter transfer pricing rules could apply whenever the trust is established in a low-tax jurisdiction (see Question 5)).
The Brazilian resident settlor or beneficiary should not be subject to Brazilian individual income tax on income generated but not distributed by an offshore trust, and any appreciation of the trust's assets.
Tax on Brazilian listed securities. If the trust invests in variable or fixed-rate securities listed on the Brazilian stock exchange, the earnings are subject to withholding tax at a rate of 10% and 15%, respectively. If the trust invests in the Brazilian capital markets, it may also benefit from the exemptions and reduced tax rates applicable to non-residents (see Question 5).
Tax on real estate. If a foreign trust receives real estate located in Brazil from a Brazilian settlor, income derived from the real estate is subject to withholding tax at a 15% rate. If the beneficiary of the payment is located in a low-tax jurisdiction, the withholding tax rate is 25%. Interest credited, paid or remitted to the trust in loan arrangements contracted in Brazil is generally subject to withholding tax at a 15% rate. Dividends or profits distributed by Brazilian companies in which the trust holds an equity interest may be remitted to non-residents free of tax. Capital gain generated by the sale of assets by the trust is subject to withholding tax in Brazil at a 15% rate where the source of payment is located in Brazil.
The characterisation of the transfer of assets by the settlor to the trust is a complex issue as it has not yet been defined by case law. Subject to analysis on a case-by-case basis, if one transfer is not considered a gift or a donation, but rather a kind of fiduciary transfer or an exchange of rights not typified under Brazilian civil law, the transfer by the settlor to the trust should not be subject to income tax in Brazil, provided the settlor transfers the assets for the same value as stated in his tax return, namely without capital gain. In this case, the 50% donation limit under forced heirship rules applicable under Brazilian law should not apply.
There is no civil law concept of gift, but rather of donation. A donation is a a gratuitous, unilateral transfer of assets from one person to another, in accordance with the formalities under the Civil Code (that is, a transfer must be effective and comply with any procedures established by the applicable laws). A donation is a non-taxable transaction (see Question 7). To the extent the distribution of assets to the beneficiaries is treated as a "donation" (as opposed to distribution), it may give rise to non-taxable income for individual income tax purposes. This is a controversial matter, however, which has not been analysed by case law.
If, under the trust agreement, the beneficiary has a right of action to demand that the trust comply with the settlor's wishes, any amount received by the beneficiary will be considered ordinary income and taxed accordingly, even if the trust effects a "donation". The entire amount distributed must be treated as ordinary income of the beneficiary.
If, on the other hand the trust is assimilated to a legal entity for Brazilian purposes, the distribution of the assets to the beneficiaries may be characterised as a redemption of capital or another type of divestment under Brazilian law.
The tax residence of the trustee does not impact on the taxation of the trust, beneficiaries and/or settlor.
Does the law provide specifically for the creation of non-charitable purpose trusts?
Does the law restrict the perpetuity period within which gifts in trusts must vest, or the period during which income may be accumulated?
Can the trust document restrict the beneficiaries' rights to information about the trust?
Brazil does not have its own trust law. Brazil has not ratified the HCCH Convention on the Law Applicable to Trusts and on their Recognition 1985.
As Brazil does not have a trust law, Brazil property law does not recognise the transfer of assets located in Brazil to a trust, including a foreign trust. In these circumstances, the terms of a trust are interpreted in accordance with Brazilian law.
Brazilian law does not contain any provisions regarding trusts used to shelter assets. However, a transfer to a trust may be invalidated as a fraudulent conveyance under the Civil Code.
The Civil Code defines the rights and obligations of the co-ownership and each co-owner can dispose of his part of the property and is obliged to pay expenses for conservation also in proportion to his part. However, co-ownership has no impact on succession.
There are currently four types of marital property regimes (see Question 24).
The rights of cohabitees/civil partners in real estate or other assets are protected by law. Civil partners are subject to the communion of assets regime, unless they select another marital property regime. In relation to cohabitees (companions), they are treated as an heir in relation to assets acquired during the relationship with the deceased (Article 1790, Civil Code).
Court decisions, including from the Supreme Court, have recognised a same-sex couple relationship as a civil partnership.
Married?
Divorced?
Adopted?
Legitimate?
Civil partnership?
Marriage is the legal union between a man and a woman. It requires the consent of both parties. The parties must each be at least 18 years old (majority) or 16 years old but then the authorisation of the parents or of the tutor is required.
Divorce is the legal dissolution of a marriage by a court. Divorce does not change the rights and responsibilities of the parents in relation to their children.
Adoption is the creation of a parent-child relationship by a judicial order. It is considered the act of placing a child with different parents than those to whom they were born.
A child is legitimate if they were born in wedlock. The law does not treat legitimate and illegitimate children differently.
A civil partnership is a union between two people as if they were married. The Civil Code recognises the civil partnership between a man and a woman as a family entity (Article 1723).
Persons under 16 years are considered incapable and, for that reason, they are represented by parents or a tutor (guardian of a minor). Persons aged between 16 and 18 years are also considered incapable but they must be assisted (not represented) by their parents or a tutor. Persons aged between 16 and 18 years may obtain emancipation and become self-supporting and independent of parental control.
A minor can own assets. However, the assets will be administered by parents or tutor, unless the minor is emancipated.
When a person loses capacity, the parents or tutor, the spouse or any relatives and the Public Prosecutor can request the judge to issue an interdiction order (Article 1768, Civil Code). The court decision pronouncing the interdiction appoints a curator to that person.
A foreign decision appointing a curator to a person that loses capacity is subject to recognition and enforcement by the Brazilian Superior Court of Justice.
The Brazilian government is analysing an amnesty programme for undeclared funds located in and outside Brazil. Legislative Bill No. 354/09, which is pending approval before the Brazilian Senate, provides for the granting of tax benefits to Brazilian tax residents holding income, assets or rights located in Brazil or abroad, whose ownership or entitlement has not been declared to the Brazilian tax authorities in due course.
The measure aims at stimulating Brazilian tax residents to regularise their fiscal situation by amending their previous income tax returns and, in case such amendment triggers a taxable event, benefiting from partial or total tax amnesty. Unfortunately, it cannot be predicted with accuracy when the Senate will approve the Bill.
In addition, the rates of inheritance tax may be increased in the near future (see Question 8, Techniques to reduce liability).
This is the Brazilian Federal Government's official website. It contains all the Brazilian federal legislation and is subject to regular updates.
This is the Brazilian Federal Revenue Department's (Receita Federal do Brasil) website. It contains the Brazilian federal legislation regarding federal taxes and contributions, customs procedures and other related subjects. The legislation is updated on a regular basis.
W www.stf.jus.br/portal/principal/principal.asp
This is the Brazilian Federal Supreme Court's (Supremo Tribunal Federal) website. It contains the status of judicial proceedings and appeals related to Constitutional claims, as well as decisions rendered by the court in said lawsuits. It is considered a highly functional database for judicial case law research and is subject to regular updates.
W www.stj.gov.br/portal_stj/publicacao/engine.wsp
This is the Brazilian Federal Superior Court's (Superior Tribunal de Justiça) website. It contains the status of judicial proceedings and appeals involving claims on federal legislation, as well as decisions rendered by the court in said lawsuits. It is considered a highly functional database for judicial case law research and gets regular updates.
W https://carf.fazenda.gov.br/sincon/public/pages/index.jsf (www.practicallaw.com/8-523-1336)
This is the Brazilian Federal Taxpayers Council's website (Conselho Administrativo de Recursos Fiscais), which is the second level of the administrative court. It contains the status of administrative recourses presented in view of tax inspections involving federal taxes. It has also the decisions rendered in administrative recourses. It is a good tool for administrative case law research and gets regular updates.
T +55 11 3048 6812
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E alessandra.machado@bakermckenzie.com
W www.trenchrossiwatanabe.com.br
Qualified. São Paulo, Brazil, 1996
Areas of practice. International tax.
Recent transactions
T +55 11 3048 6821
F +55 11 5506 3455
E lavinia.junqueira@bakermckenzie.com
W www.trenchrossiwatanabe.com.br
Qualified. São Paulo, Brazil, 2009
Areas of practice. Tax.
Recent transactions. Advising financial institutions and non-financial companies on issues concerning the taxation of financial products, international taxation, outbound and inbound investments in Brazil, mergers, acquisitions, joint ventures and corporate taxation as a whole.
T +55 11 3048 6761
F +55 11 5506 3455
E luciana.nobrega@bakermckenzie.com
W www.trenchrossiwatanabe.com.br
Qualified. São Paulo, Brazil, 2010
Areas of practice. Tax, in particular international tax planning and direct taxes.
