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Brazil - Overview and introduction

Brazil - Overview and introduction

Taxation of international executives


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A foreign national is subject to Brazilian income tax on his/her worldwide income once he/she becomes a resident of Brazil for tax purposes. As a resident, his/her taxable income cannot be reduced by an allocation of income to days worked outside Brazil. In general, any remuneration received for services rendered by a resident foreign national constitutes taxable income.

A foreign national that is a non-resident of Brazil for tax purposes is not subject to tax on remuneration paid outside Brazil. A non-resident is subject to a flat tax of 25 percent on remuneration paid in Brazil.

An individual’s tax liability is due on a monthly basis as income and gains are realized. The tax on salaried income paid by a Brazilian entity is withheld at the source. Thus, an individual who is paid on a Brazilian payroll from only one employer during the year would not have any tax due when the annual income tax return is filed, provided the taxes were withheld properly. However, the individual may be entitled to certain deductions, which may be claimed on the annual tax return, in which case he/she may be entitled to a tax refund when the annual return is filed.

Income received abroad by a Brazilian tax resident must be reported and the corresponding tax paid by the last day of the month following the month the income was received. The monthly Carnê-Leão must be completed and the taxable base includes all remuneration and benefits paid abroad to a Brazilian tax resident and all other income (such as interest, dividends, and rental income). All income received abroad is subject to a monthly tax in accordance with the progressive tax rate table.

The official currency of Brazil is the Brazilian Real (BRL).

Herein, the host country refers to the country to which the employee is assigned. The home country refers to the country where the assignee lives when he/she is not on assignment.

© 2019 KPMG Tax Advisors-Assessores Tributrios Ltda., a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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