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Rio de Janeiro, Brazil

Any individual that is considered to be a resident for tax purposes in Brazil is subject to Brazilian taxation over worldwide income (wages, interest, dividends, rental income, capital gains, etc.) under certain circumstances and depending on the type of visa held on arrival in Brazil. Different circumstances prevail for extended business travelers to Brazil, depending on the type of visa they hold.

Key message

Extended temporary visas without labor contract with Brazilian Entity who stay less than 183 days during any 12-month period may be able to avoid taxation in Brazil if they can be considered non-resident and no part of their wages is paid locally.

Income tax

Liability for income tax

Tax residency

Permanent visa

A foreign national who enters Brazil with a permanent visa is considered to be a resident for tax purposes from the day of arrival and, therefore, is subject to tax on worldwide income from the first day of physical presence in Brazil. This type of visa is mandatory for employees who will be responsible for a company in Brazil, that is, the company’s administrator. Permanent visas can also be granted to foreign individual investors (minimum investment of 150,000 Brazilian real (BRL)) and foreigners that marry a Brazilian.

Temporary visas (type V) – with or without an employment relationship with a Brazilian entity

The holder of a temporary work visa is also considered to be a resident for tax purposes from the day of arrival, if the individual is employed by a Brazilian entity. If there is no employment relationship with a Brazilian entity, the holder of a temporary work visa will be considered a resident for tax purposes after the 183rd day of physical presence in Brazil, consecutive or not, within a 12-month period, beginning on the date of arrival or on obtaining a permanent visa, if this date occurs after 183 days of physical presence.


A foreign national who is a non-resident of Brazil for tax purposes is not subject to tax on remuneration paid outside Brazil. Foreigners arriving in Brazil who are holders of temporary visas without an employment contract with a local company, before completing 183 days (consecutive or not) of stay in Brazil, counted within any period of 12 months, are considered non-resident taxpayers.

The general rule is that a person who is a resident of Brazil is assessable on worldwide income. Non-residents and temporary residents are generally assessable on income derived directly or indirectly from sources in Brazil. Income considered to be offshore is tax-exempt.

Extended business travelers are likely to be considered non-residents of Brazil for tax purposes and may be considered tax-exempt if they enter on a business visa, all their wages are paid offshore, and no part of their wages are paid pursuant to a local contract or a technical assistance agreement. A business visa is not considered a work permit, so these individuals are not permitted to perform remunerated activities. They are able to perform ancillary activities such as conducting meetings, participating in seminars, meeting customers and suppliers, prospecting the local market, and so on. It is important to mention, however, that a business visa subjects the individual to the counting of 183 days as mentioned above.

Definition of source

Employment income is generally treated as Brazilian-sourced compensation where the individual performs services pursuant to a local contract or a technical assistance agreement between a Brazilian company and a foreign company.

A Brazilian tax resident’s wages paid through Brazilian payroll is taxed at the source, and any portion of these wages paid through a foreign source is taxed in Brazil on a monthly calculation named Carnê-Leão, which is a Brazilian monthly income tax calculation.

Tax trigger points

Technically, there is no threshold/minimum number of days that exempts the employee from the requirements to file and pay tax in Brazil. To the extent that the individual qualifies for relief in terms of the dependent personal services article of the applicable double tax treaty, there will be no tax liability. The treaty exemption will not apply if a Brazilian entity is the individual’s economic employer.

Types of taxable income

  • Wages paid by a Brazilian entity are subject to withholding at the source.
  • Income from investments held in Brazil is subject to withholding at the source.
  • Income earned abroad (such as wages, dividends, interest, rental, etc.) is calculated through Carnê-Leão.
  • Capital gains from assets held in Brazil and abroad. Taxable gains are subject to a withholding tax rates on capital gains are as follows:
    • 15% – capital gains up to BRL5 million;
    • 17.5% – capital gains between BRL5 million and BRL10 million;
    • 20% – capital gains between BRL10 million and BRL30 million;
    • 22.5% – capital gains over BRL30 million.

The capital gains tax is applicable on the sale of real estate, vehicles, objects of art and collectibles sold in Brazil or abroad and to stocks sold in foreign markets. Non-residents are only subject to capital gains tax on assets sold within Brazil. The gain is equal to excess of the sales price over the cost value of the asset sold. There are certain exemptions applicable to these situations.

Gains from the sale of stock on a Brazilian stock exchange, or comparable institutions, are subject to variable income taxation. In this case, losses may be offset from gains incurred within the same month or subsequent months. Gains received from sales of stocks on the Brazilian stock exchange will be treated as variable income and will be taxed at a flat 15 percent up to 22.5 percent rate. All net gains realized from the sale of stocks and gold on the Brazilian stock exchange and markets will be tax exempt, as long as the total proceeds are equal to or less than BRL20,000 per month for Brazilian stocks, and or BRL35,000 per month for others.

According to internal legislation, any income received by a Brazilian resident for tax purposes is taxable in Brazil (such as wages, allowances, interest, dividends, rental income, etc.) under a progressive tax table with tax rates from 0 percent up to 27.5 percent. Tax treaties can help in avoiding double taxation.

Stock option exercises are not expressly regulated, and they are likely to be taxed, but may be taxed at a flat rate, depending on the conditions of the plan.

There are no federal income taxes applied to holding assets. There are state and municipal taxes over property and automotive vehicles, although capital gains can be subject to a 15 percent tax rate in Brazil.

For extended business travelers, the types of income that are generally taxed are employment income, Brazilian-sourced income, and gains from taxable Brazilian assets (such as real estate). Typical allowances can be applied to employment income.

Tax rates

Net taxable income is taxed at graduated rates ranging from 0 percent to 27.5 percent for resident taxpayers. The maximum tax rate is currently 27.5 percent on income earned over BRL4,664.68 monthly. Non-residents are subject to a flat 25 percent tax rate on Brazilian-sourced income paid through a Brazilian payroll.

Social security

Liability for social security

Any employee on a Brazilian payroll is subject to social security contributions. The rates vary depending on the individual’s salary level.

According to the current legislation, the monthly social security contribution in Brazil (‘INSS’) is due on the totality of the remuneration paid to the employee, at rates of 7.5 percent up to 14 percent, with a contribution cap of BRL713.09 for the employee for the Fiscal Year 2020.

The employer’s contribution is determined at the rate of approximately 26.8 percent up to 28.8 percent of the total payroll, with no limitation on the amount of earnings subject to contributions. These rates can be higher under very specific circumstances.

Brazilian indemnity severance fund

The employer is also subject to an 8 percent contribution on the total compensation paid to the employees in favor of the Brazilian Indemnity Severance Fund (FGTS).

In summary:

Paid by
Type of insurance Employer (percent) Employee (percent) Total (percent)
Social security 26.8% – 28.8% 14% with cap 7.5% up to 14%,
Severance indemnity  8% none 8%

Brazil has fixed social security agreements with the following countries/jurisdictions: Argentina, Belgium, Bolivia, Greece, Spain, Chile, Italy, United States, Luxembourg, Paraguay, Germany, Uruguay, Portugal, Cape Verde Island, Japan, Korea, El Salvador, Ecuador, Canada, France and Quebec.

The main goals of the social security treaties are to make sure the working time in one country/jurisdiction is valid towards the minimum working period for retirement purposes in the other country/jurisdiction, to allow the cooperation between Brazil and overseas authorities in enforcing their respective laws, and to guarantee the individual’s rights. There are several questions on whether such treaties are effective in avoiding social security taxation.

Compliance obligations

Employee compliance obligations

  • The taxpayer is required to file a tax return by the last business day of April, of the year following the end of the taxable year, which is 31 December. Income tax is levied at progressive rates on an individual’s taxable income for the year, which is calculated by subtracting allowable deductions from the total assessable income. Non-residents are taxed at a flat rate of 25 percent.

There is no provision for an individual to obtain an extension of time for filing the return. Late-filed returns are subject to a penalty and interest. Any balance due with the annual tax return must be paid on 30 April. The taxpayer, however, is given the option to pay the balance in six monthly installments, subject to interest charges, beginning on the final filing date.

Resident taxpayers are required to pay income tax on their worldwide income on a monthly cash basis. Resident taxpayers are subject to a withholding tax system on their Brazilian-sourced income based on a progressive tax table. They are also subject to the Brazilian monthly income tax on the sum of their offshore income (wages, compensation, interests, dividends, rental income, capital gains, etc.) and to file annual Brazilian income tax returns.

  • Resident taxpayers are required to pay monthly income tax (Carnê-Leão) on income that was not subject to withholding tax by any other local source. Generally, this means offshore income and rental income received from other individuals.

This tax is also calculated based on a progressive tax table. The payment has to be made up to the last business day of the following month.

  • Non-resident individuals may not be required to file a Brazilian annual tax return if they receive only non-Brazilian-sourced income or if there is only Brazilian-sourced income paid through a Brazilian payroll that is subject to the flat tax rate at source.
  • Declaration of assets owned abroad submitted to the Brazilian Central Bank (CBE) is applicable to all residents of Brazil who maintained such status as at 31 December, and who have foreign-held assets and rights whose value is equal to or more than 100,000 US dollars (USD).
  • SISCOSERV – this report is applicable to all residents that receive income abroad. It is an accessory obligation set by Law 12.546/12 whose purpose is to make taxpayers record services, intangibles and any other transactions which cause changes in the equity of individuals or legal entities residing or domiciled in Brazil and are carried out with individuals or legal entities residing or domiciled abroad.

Specifically regarding individuals, under this law they must provide information about earnings consisting of salaries, bonuses and donations received from foreign sources. 

Other issues

Double taxation treaties

In addition to Brazil’s domestic arrangements that provide relief from international double taxation, Brazil has entered into double taxation treaties with approximately 29 countries/jurisdictions to prevent double taxation and allow cooperation between Brazil and overseas tax authorities in enforcing their respective tax laws.

Reciprocity of treatment is also admissible between Brazil and the US, the UK, and Germany.

Permanent establishment implications

There is the potential that a permanent establishment (PE) could be created as a result of extended business travel, but this would depend on the type of services performed and the level of authority the employee has.

A PE is created when the individual remains in the country/jurisdiction acting on behalf of the employer while making decisions and deals on the employer’s behalf.

Exchange control

Brazil has strict foreign exchange controls, and remittances abroad may encounter several Central Bank restrictions. Although remittances that fit into preset categories already defined by the Brazilian Central Bank may not find difficulties in processing, remittances that cannot be classified into the preset categories will probably need approval from the Brazilian Central Bank prior to processing.

All remittances of funds from Brazil abroad above BRL10,000 must be made through the official banking system and require certain documentation from the bank.

Most common preset categories are:

  • real estate purchase
  • contribution to home country/jurisdiction retirement plans by expatriates employed in Brazil
  • transfer of personal assets (when leaving the country/jurisdiction)
  • inheritance
  • contributions to associations
  • business trips
  • payments in support of dependents abroad
  • educational pursuits
  • medical treatment
  • rental payments
  • use of data services
  • credit cards.

Non-deductible costs for assignees

Non-deductible costs for assignees include contributions by an employer to non-Brazilian pension funds.


All information contained in this publication is summarized by KPMG Assessores LTDA, the São Paulo - Brazil member firm affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity, based on the Brazilian Tax Code – 9580 on 11 November 2018 and subsequent amendments; Law 8,036/ 1990 and subsequent amendments; Law 8,213/ 1992 and subsequent amendments and Normative Instructions provided for the Brazilian Tax Authorities.

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