Doctor with Investments Abroad: Income Tax, Carnê-Leão and CBE

A Brazilian resident doctor reports, in the annual adjustment and at a 15% rate, income from investments and profits of controlled companies abroad (Law No. 14,754/2023 (Lei 14.754/2023)). Fees paid by a source abroad go into the carnê-leão (monthly self-assessment). With USD 1 million or more outside the country on December 31, there is also the CBE report to the Central Bank.

This text is a guide to the rules, not the account of a real client. It does not promise savings and does not protect anyone from inspection: the result depends on each doctor's tax residence, type of income and structure.

What type of income or investment does the doctor have abroad?

The first step is to separate the source of the money, because each source falls under a different rule. The same doctor can have all four situations in the table at the same time.

In all cases, the starting question is tax residence. Brazil's Federal Revenue Service (Receita Federal) states that income from sources abroad received by non-residents is not reached by Brazilian taxation, but this condition has its own rules and depends on the specific case.

How does Law 14,754 tax a doctor who invests abroad?

A resident individual reports, separately from other income, income from financial investments abroad and profits and dividends of controlled entities. The tax is 15% on the annual portion, and the law says that no deduction from the tax base applies (art. 2, § 1).

Some points that tend to raise questions:

• •Gains on assets that are not financial investments: remain under the rules of art. 21 of Law No. 8,981/1995 (Lei 8.981/1995) (art. 2, § 2).
• •Exchange-rate variation on a checking account: not taxed when the deposit earns no interest and is held at a financial institution recognized and authorized by the country's monetary authority (art. 2, § 3).
• •Cash: exchange-rate variation is not taxed up to USD 5,000.00 of disposals in the calendar year. Above that limit, gains are taxed in full (art. 2, §§ 4 and 5).
• •Tax paid abroad: can be deducted from the individual income tax (IRPF) due if there is an agreement or treaty with offsetting, or reciprocal treatment. The deduction has a cap and does not apply to tax that can be reimbursed or refunded (art. 4).

Anyone who keeps an account and investments outside the country will find the practical step-by-step in offshore bank account for Brazilians.

What if the doctor controls a company or LLC abroad?

If the individual has a majority of the votes or more than 50% of the capital or of the rights to profits, the entity is considered controlled, whether it is a company, fund or foundation (art. 5, § 1). The type of entity does not change this definition.

The timing of taxation of the profit depends on the classification:

1. •Profit taxed on December 31 of each year: applies to a controlled entity located in a favored-taxation country or benefiting from a privileged tax regime (arts. 24 and 24-A of Law No. 9,430/1996 (Lei 9.430/1996)), or that earns own active income below 60% of total income (art. 5, § 5).
2. •Profit taxed when made available: applies to profits determined from January 1, 2024 by controlled entities that do not fall under those cases. The law considers profit made available on payment, credit, delivery, use or remittance, whichever occurs first (art. 6).
3. •Option to report as if held directly: the individual can report the controlled entity's assets, rights and obligations as if they were their own. The option applies per entity and is irrevocable and irreversible while the doctor holds the entity (art. 8).

When there is a trust, the law considers that the assets remain owned by the settlor and pass to the beneficiary on distribution or on the settlor's death, whichever comes first. The trust's income is taxed under the rules of the holder (art. 10). To understand the jurisdiction, see the pages for Wyoming and Nevis.

How does the carnê-leão work for fees coming from abroad?

A doctor resident in Brazil who is paid by a source located abroad pays the carnê-leão, subject to treaties, agreements or reciprocity to avoid double taxation. Among the taxable income received from individuals and from a source abroad, the Receita Federal lists work without an employment relationship and the rental of assets.

What the Receita Federal says about the calculation:

• •Conversion: the income and the tax paid abroad are converted into dollars at the rate of the monetary authority of the country of origin on the date of receipt. Then they are converted into reais at the Central Bank buying dollar rate of the last business day of the first half of the month before the month of receipt.
• •Offsetting: if there is a treaty or reciprocity, the tax paid in the country of origin can be offset in the carnê-leão and in the Annual Adjustment Tax Return, within the legal limit.
• •Payment: Law 7,713/1988 (art. 8, § 2) requires paying the tax by the month following the receipt of the income. The due day and the calculation are in the Receita Federal's Carnê-Leão Manual.

There is a distinction that matters for those who practice in a group. The Receita Federal treats as legal-entity income the case in which services are performed by another qualified professional for pay, or operated jointly by two or more individuals in a partnership. In that case the regime changes, and the classification should be made with an accountant.

When must the doctor file the CBE with the Central Bank?

The annual CBE report is required when Brazilian capital abroad, on December 31, totals USD 1,000,000.00 or more, or the equivalent in other currencies. It is submitted from February 15 to April 5 of the following year (Resolution BCB 279/2022, arts. 10 and 13).

Practical points of the resolution:

• •Who reports: the resident individual or legal entity that holds the capital abroad (art. 8).
• •What is included: interests in non-resident companies, units of investment funds abroad, debt securities, deposits at non-resident institutions, real estate abroad and virtual assets, among other items (art. 7).
• •Quarterly report: only required from USD 100,000,000.00 (art. 11).
• •Documents: whoever reports must keep for 10 years the documentation that supports the information (art. 15).
• •Penalties: the resolution refers to those provided in legislation and in specific regulation (art. 16).

The legal basis is art. 10 of Law No. 14,286/2021 (Lei 14.286/2021), which gives the Central Bank the regulation and monitoring of Brazilian capital abroad. The CBE is an obligation to the Central Bank and does not replace the declaration of assets and income made to the Receita Federal.

How do I avoid compliance mistakes?

The most common mistake is treating the structure as the solution and forgetting the declaration. A company abroad eliminates none of the duties above: it only changes which rule applies. Before moving money, it is worth checking what Receita Federal inspection of offshore usually looks at and what the 10 most common mistakes when setting up an offshore are.

A minimum roadmap to organize the case:

1. •Define the doctor's tax residence in the calendar year.
2. •Map each income: investment, fee, profit of a controlled entity or trust.
3. •Keep statements, contracts and proof of tax paid abroad.
4. •Calculate the monthly carnê-leão on what is due and check the CBE threshold on December 31.
5. •Review the whole with an accountant and a lawyer, who can point out requirements specific to the profession and the structure. On asset protection topics, the complete guide to offshore asset protection provides the legal context.