The recent COSIT Ruling No. 56/2026 issued by the Receita Federal do Brasil has brought an important warning for Brazilians who invest or structure assets abroad through LLCs in the United States.
In objective terms, the Brazilian tax authority has consolidated its position that LLCs with non-U.S. resident members and treated as transparent (pass-through) entities should be classified as a privileged tax regime.
Why does this matter in practice?
This classification is not merely technical—it has direct financial and reporting implications:
- Automatic taxation in Brazil: profits become taxable annually, even if not distributed;
- Mandatory accounting under Brazilian standards (BR GAAP);
- Increased tax exposure and stricter compliance requirements;
- Potential impacts on succession planning and family structures.
In other words, structures that were previously considered efficient may become more costly and complex.
The core issue
Many taxpayers argued that, since LLC profits are taxed in the United States at the member level (with rates of up to 37%), there would be no relevant tax benefit.
The Brazilian tax authority rejected this argument.
Its position is clear: what matters is not the effective taxation, but rather the legal structure of the LLC, which, in certain circumstances, allows the entity itself not to be directly taxed in the United States—this alone is sufficient to characterize a privileged tax regime.
Conclusion
COSIT Ruling No. 56/2026 reinforces a clear trend: Brazilian tax authorities are increasingly attentive to international structures used by individuals.
More than ever, maintaining an offshore structure is not merely a tax decision—it is a strategic one, requiring multidisciplinary analysis and constant updates.