Brazilian pension funds have started to slowly invest abroad, on
the one hand this is an extraordinary opportunity for
diversification of assets, well above what the internal market can
provide, on the other this is something that requires attention to
the legal obligations and regulations, especially those that relate
to taxes payable. Uncle Sam is watching and has even set a date:
December 31. Ignoring it will not be cheap: a withholding tax of
30% on income and principal, if not complaint , is enough to cause
damage to the fund's performance in which it is applied.
Is not refundable – "Although withholding tax may sound
like something refundable, is in fact a penalty, because there is
no refund procedure," explains
Francine Balbina, Executive Director of DMS Offshore
Investment Services, which provides consulting services on
governance for offshore investment funds. Francine notes amounts
withheld in cases of non-compliance are generally
non-refundable.
