BRAZIL Law and Practice Contributed by: Daniel Zugman and Frederico Bastos, BVZ Advogados | Bastos, Bari, Vilela e Zugman
1.7 Transparency and Increased Global Reporting Brazil has adopted several measures to align its tax system with international transparency and anti-abuse standards. Key developments include the following. • Anti-abuse measures – new transfer pricing rules aligned with the arm’s length standard and Law No. 14,754/2023, which introduced specific tax rules for offshore entities, foreign investments and trusts, reducing the effectiveness of structures based primarily on tax deferral or opacity. • International transparency – Brazil participates in the Common Reporting Standard (CRS) through the e - Financeira system, has an intergovernmental agreement with the United States to implement FATCA, and is a party to the Multilateral Conven - tion on Mutual Administrative Assistance in Tax Matters. • DAC 6 – Brazil is not subject to EU DAC 6, although Brazilian taxpayers may be indirectly affected where cross-border arrangements involve intermediaries or taxpayers subject to the Euro - pean disclosure rules. • Beneficial ownership – certain Brazilian and foreign entities must report their ultimate beneficial owners to the Brazilian Federal Revenue Service, includ - ing through the e-BEF (Brazil’s electronic benefi - cial ownership reporting system). Brazil does not maintain a broadly accessible public beneficial ownership register. In an increasingly sophisticated enforcement environment, this information may be cross-checked against tax returns, financial data and corporate records to identify the individuals who ultimately control or benefit from domestic and cross-border structures, reconstruct transac - tions and assess whether their practical implemen - tation is consistent with their legal form. In practice, these measures require greater consisten - cy between tax filings, corporate records and benefi - cial ownership information. International wealth struc - tures remain available, provided they have adequate substance, legitimate non-tax purposes and proper documentation. Brazil balances transparency and privacy by making information available to the tax authorities while pre -
rules for foreign trusts, substantially reducing the tax deferral historically associated with offshore structures. Offshore companies and trusts never - theless remain relevant for investments, govern - ance, asset protection and succession planning. Law No. 15,270/2025 introduced taxation on dividends distributed by Brazilian companies and minimum income tax rules for certain high-income individuals, requiring existing holding and invest - ment structures to be reassessed. • Real estate holding companies – the implementa - tion of Brazil’s new dual VAT system, composed of the IBS ( Imposto sobre Bens e Serviços , or Tax on Goods and Services) and CBS ( Contribuição sobre Bens e Serviços , or Contribution on Goods and Services), may reduce some of the tax advantages traditionally associated with real estate holding companies, particularly regarding rental income. These structures remain relevant for succession, governance and asset management, but should no longer be adopted based on tax savings alone. • Real Estate Transfer Tax (ITBI) – the scope of the ITBI immunity for contributions of real estate to corporate capital remains uncertain. The Federal Supreme Court has already limited the immunity in certain situations, and Theme No. 1,348 will deter - mine whether it applies to companies predomi - nantly engaged in real estate activities. • Inheritance and Gift Tax (ITCMD) – the tax reform made progressive ITCMD rates mandatory, increased the relevance of fair market value for asset valuation and introduced clearer rules for gifts and inheritances involving foreign elements. Brazil is also considering a comprehensive revision of its Civil Code, which may affect family and succes - sion law. In parallel, expanded information exchange, technological advances and increasingly sophisticat - ed audits have increased scrutiny of domestic and cross-border wealth structures. Overall, recent reforms have generally sought to broaden the tax base and increase government rev - enue rather than provide tax relief, reinforcing the need for periodic reviews of tax and estate planning structures.
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