With the COVID-19 pandemic, many Brazilians decided to invest outside the country. And real estate in the United States appeared as an option to diversify investment. This means that Brazilians should be careful in distributing a declaration with this legacy in a North American country to avoid the collection of fines of up to 25 thousand US dollars per year. In practice, this means that those who haven’t made a declaration by April 15 run the risk of being fined, as the declaration must be sent by this date each year.
Louis Guilherme b. Goncalves, partner at BT7 Partners, explains that it is very common for Brazilians who do not live in the United States to own LLCs and corporations in that country, especially when they decide to purchase a property there. , but forget that it is necessary to comply with some local obligations, especially obligations with the US tax authorities. He also says that taxpayers who have forgotten to give the declaration should ask for an extension of the deadline till October 15.
“Since 2017, the US has required that LLCs that have only one non-U.S. resident shareholder and corporations that have non-U.S. resident shareholders, submit a Form (specific statement) for the purpose of identifying partners or shareholders and transactions carried out between US companies and these partners or shareholders as well as other parties deemed to be ‘related’ to the US company, they state.
LLCs with a sole partner, whether natural or legal, are treated as U.S. tax disregarded entities and thus the consequences determined by these LLCs, when taxable, are taxed in the partner’s person. and not the LLC within its scope.
Corporations, on the other hand, are entities whose profits are taxed within the ambit of the company, with the partner being taxed only when he receives salary or dividends.
“Thus, to determine whether the results are being taxed in the event of these US companies having non-US partners, Form 5472 was required to be submitted, and this report details the company’s model.” (LLC or corporation), as well as the transactions made between them and their partners”, commented Gonsalves.
“We have seen an increasing number of Brazilians who are unaware of this reporting requirement, particularly Brazilians who have opened LLCs where there is only one partner and have not been making relevant statements in recent years, thus subject to heavy fines. are,” he says.
He points out that many of these Brazilians bought homes for family use or for seasonal rental, and in most cases, even after reporting any leasing income, they failed to provide this specific report, Which in itself brings with it the risk of already heavy losses. Fine
According to the expert, failure to submit the form can result in a fine of up to USD 25,000 per calendar year, without prejudice to fines and late payment interest, in respect of tax not paid.
BT7 Partners Is a company born out of the daily experience of Brazilian and Latin American customers who are interested in immigrating, doing business or investing in the United States.