Content Creators With Foreign Income: How to Structure It

A Brazil-resident creator paid by foreign platforms declares that income in Brazil: as an individual, through the monthly carnê-leão (Law No. 7,713/1988 (Lei 7.713/1988), art. 8) and in the annual return. Opening a company abroad does not eliminate the tax. If the creator controls it, Law No. 14,754/2023 (Lei 14.754/2023) may tax the profit on December 31, even without distribution.

How is a Brazil-resident creator taxed on what they receive from foreign platforms?

They pay income tax as an individual. Art. 8 of Law 7,713/1988 subjects to tax the individual who receives, from another individual or from sources abroad, income that was not taxed at source in Brazil. The Federal Revenue Service's income tax manual confirms it: a resident individual who receives income from an individual or from abroad, without taxation at source in Brazil, must pay the carnê-leão (the self-assessed monthly income tax payment) every month.

Practical points set by the Federal Revenue Service and the law:

• •Deadline: the tax is due on the last business day of the month after the one in which the earnings were received.
• •Penalty: failure to pay the carnê-leão subjects the taxpayer to an assessment penalty of 50% of the tax due, according to the Federal Revenue Service manual.
• •Conversion: dollar amounts are converted into reais at the buying rate set by the Central Bank for the last business day of the first half of the month before the month of receipt (Law No. 9,250/1995 (Lei 9.250/1995), art. 6).
• •Work expenses: those with non-salaried work income can record in the Cash Book (Livro Caixa) the operating expenses necessary for the activity, supported by suitable documents, limited to monthly revenue.

The step-by-step of the carnê-leão and the offset of tax paid abroad appear in detail in the article on foreign income of podcasters. This guide covers what is specific to the content creator and the structure they choose.

What revenue sources does a creator have and what should you watch in each?

Each source has a different payer and a different tax risk. Separating revenue by origin is the first step in deciding on the structure.

When is tax withheld in the US and what is the W-8BEN for?

Withholding depends on the nature of the payment and on whether the income is US-source. According to IRS Publication 515, a foreign person is generally subject to 30% on most US-source income, and a reduced rate only applies when there is a treaty between the country of residence and the US. The place where personal services are performed determines the source of the income. US-source royalties are subject to withholding.

Brazil does not appear on the list of US income tax treaties published by the IRS. This means there is no Brazil-US treaty to reduce the withholding rate.

Form W-8BEN is given by the foreign person to the payer (withholding agent) when there are amounts subject to withholding. The IRS says to provide it when the payer asks, whether or not a reduced rate is claimed. It identifies you as a foreign person, but does not create a treaty where there is none. What each platform withholds appears in its statement and tax documents; use those records in the Brazilian return.

When is it worth thinking about a company: individual, company in Brazil or company abroad?

The choice depends on the volume and nature of the revenue, the risk and the cost of maintaining the structure. Compare the three routes by the points the law addresses.

A company abroad may make operational sense, for example to receive from foreign clients or to separate the business's assets, but that is a matter of organization and not of tax savings. Anyone planning to open an LLC should read the guide to LLC for content creators and learn about the available corporate structures.

What does Law 14,754 change for a creator who controls a company abroad?

It defines when the company's profit becomes the creator's income in Brazil. Art. 5 considers a controlled entity one in which the individual holds rights that ensure preponderance in decisions or the power to elect or remove most of the directors, or holds, directly or indirectly, more than 50% of the capital or profit rights.

The treatment depends on how the controlled entity is classified under art. 5, § 5:

1. •Controlled entity in a favored-taxation country, with a privileged tax regime, or with own active income below 60% of total income: profits are taxed on December 31 of each year in the Annual Adjustment Return (DAA), at a 15% rate, with no deductions from the base (arts. 2, § 1, and 5).
2. •Controlled entity that does not fall under those cases: profits earned from January 1, 2024 are taxed when actually made available to the creator (art. 6, II).

There is a practical trap. Art. 6, sole paragraph, II, treats profits as made available in credit operations with the individual or a related person, if the lending company has profits or profit reserves. In other words, a loan from the company to the creator can accelerate taxation. For the full reasoning, with a table, see the article on foreign podcast income.

Which declarations and controls must a creator with a structure abroad maintain?

It depends on the route chosen. Use this list as a starting point and confirm each item with an accountant:

• •Monthly carnê-leão, for income received from abroad without taxation at source in Brazil, when the creator receives as an individual.
• •Annual Adjustment Return, with investment earnings and profits of controlled entities abroad declared separately from other income (Law 14,754, art. 2).
• •Declaration of Brazilian Capital Abroad (CBE), when assets abroad total US$ 1,000,000.00 or more on the December 31 reference date (BCB Resolution 279/2022, art. 10). The Central Bank's CBE page has the current rules.
• •Form 5472 in the US, if the structure is a US LLC with a foreign owner and there are reportable transactions. The IRS instructions treat as a "reporting corporation" the US legal entity with 25% or more foreign capital, including a single-foreign-owner entity, and provide a US$ 25,000 penalty for failing to file on time.
• •Records and contracts: platform statements, contracts with brands and proof of each receipt.

What is the step-by-step to organize creator income?

Follow this sequence before opening any company:

1. •List revenue by source and payer, using the table above.
2. •Confirm your tax residency. The rules above apply to those resident in Brazil; see the guide on international tax residency.
3. •Gather the platforms' documents, including what was withheld in the US, for the Brazilian return.
4. •Regularize the carnê-leão for what has already been received, with the correct currency conversion.
5. •Compare the routes (individual, company in Brazil, company abroad) with an accountant, based on the real numbers of your operation.
6. •If you choose a company abroad, check whether it will be controlled and under which case of art. 5, § 5, it falls, and plan the accompanying declarations.
7. •Separate the accounts of the company and personal ones, and document any loan to the partner.
8. •Plan international receipts. The comparison of international transfers helps choose the channel. To align the structure with tax planning, see the tax planning service.