Brazil Personal Income Tax

Residents are taxed on worldwide income. Non­residents are taxed on Brazilian-source income only.

Determination of residence for tax purposes depends on which visa an individual uses to enter the country. Foreign nationals holding either temporary type “V” visas based on a labor contract with a Brazilian company or permanent visas are taxed as resi­dents from the time they enter Brazil. Other foreign nationals are taxed as nonresidents if they satisfy the following conditions:

  • They hold other types of temporary visas.
  • They are not involved in a local labor relationship.
  • They do not stay in Brazil for more than 183 days (consecutive or non-consecutive) during any 12-month period.

A foreign national who remains in Brazil for longer than 183 days is subject to tax on his or her worldwide income at the progressive rates applicable to residents.

Before their departure from Brazil, tax residents should file the Departure Communication and the Departure Income Tax Return and obtain tax clearance to resolve their final liability for Brazilian income tax. Otherwise, these individuals may be consid­ered resident for tax purposes, subject to Brazilian income tax on worldwide income during the 12-month period following depar­ture. From the time the individual files under the departure pro­cess mentioned above, taxation as a nonresident applies to Brazilian-source income only.

Income subject to tax. The various types of income subject to tax are described below.

Employment income. Taxable employment income generally includes wages, salaries, and any other type of remuneration and benefits received by an employee from an employer. The treat­ment of employer-provided allowances varies, as described below.

Under Brazilian law, individuals are taxed on a cash basis. Pay­ments from foreign sources, including bonuses or premiums relat­ed to services rendered, that are made before or after an assign­ment in Brazil (non-tax resident period) are generally not taxable if received during a period when the individual is not a resident for tax purposes. Consequently, these payments should be scheduled so that they are received when the individual is not yet resident for tax purposes or after the individual applies under the departure process and requests tax clearance before repatriation.

Reimbursements received by employees from employers for income tax liability are recognized as income on a cash basis. If employers make the income tax payments directly, the amounts paid are taxable to the employees.

Schooling allowances for an individual’s family members are considered indirect salary (a fringe benefit) and are taxed accord­ingly. For tax purposes, no distinction is made between amounts paid directly by the company or reimbursed by the company to an employee. Moving allowances are generally not taxable if paid in a lump sum by the employer.

Other allowances received by expatriates for work performed, including foreign service premiums and allowances for home leave, costs of living and housing, are subject to regular taxation.

Employees are not taxed on obligatory monthly deposits equiva­lent to 8% of gross salaries that are paid by employers to the Severance Pay Indemnity Fund (FGTS), which is administered by the government. The amounts deposited, plus interest, may be withdrawn tax-free by the employees under certain conditions, including retirement or dismissal without just cause.

In addition, an employee who is dismissed arbitrarily or without just cause is entitled to a tax-free indemnification from the employer equal to 40% of the employer’s deposits in the employ­ee’s FGTS fund.

Self-employment income. Self-employed resident individuals are subject to tax on income from a trade, business or profession.

Investment income. Interest income received by resident individ­uals from sources abroad is generally included in taxable income and is taxed at the rates stated in Rates. Local financial income and gains from fixed or variable interest financial investments are taxed exclusively at source. The rates vary from 15% to 22.5%, depending on the investment term. In general, financial institu­tions withhold the tax due and the earnings are credited net.

Net rental income and royalty income from Brazilian and foreign sources are generally included in taxable income and are taxed at the rates stated in Rates.

Brazilian dividends paid to nonresidents are exempt from with­holding tax. Rental payments to nonresidents from Brazilian sources are subject to a 15% final withholding tax, and other payments to nonresidents from Brazilian sources are generally subject to a 25% final withholding tax, unless a lower treaty rate applies. Financial investments should be analyzed on a case-by­case basis.

Taxation of employer-provided stock options. Employer-provided stock options are not subject to tax at the time of grant. The taxation of equity plans represents a gray area in Brazil. In gen­eral, stock options are taxable at the time of exercise. The differ­ence between the market price and the strike price is considered a fringe benefit and is taxable as employment income at a maximum rate of 27.5%. For purposes of capital gains tax, when the em ployee sells the shares the cost basis is the market value of the shares at the time of exercise (the spread between the strike price and the market value has already been taxed as employment in come). A positive result from the sale of personal assets located outside Brazil is subject to capital gains tax at a flat rate of 15%. Realized gains from sales proceeds of up to BRL35,000 in a given month are exempt from capital gains tax.

Capital gains. Capital gains are defined as the difference between the sale price of an asset and its acquisition price.

Under Law No. 13,259/16, effective from 1 January 2016, gains realized on the sale of assets and rights of any nature (real estate, vehicles and shares) are subject to the following progressive tax rates.

Exceeding (BRL) Not exceeding (BRL) Rate (%)
0 5000000 15
5000000 10000000 17.5
10000000 30000000 20
30000000 __________________ 22.5

Capital gains derived from the sale of shares listed on Brazilian stock exchanges are exempt from tax if the sale price is less than BRL20,000. If the sale price exceeds BRL20,000, the entire gain is taxed at a rate of 15%.

A special exemption is granted to individuals selling their only residence if they have owned it for at least five years and if the sale price does not exceed BRL440,000. In addition, gains derived from sales of residential real properties are exempt from tax if the seller uses the proceeds from the sale to buy other resi­dential real estate properties in Brazil within 180 days from the first contract execution date.

Deductions. The following are the only deductible expenses per­mitted when calculating monthly income tax liability:

  • Social security taxes paid to Brazilian federal, state or munici­pal entities
  • Amounts paid as alimony and pensions in accordance with a Brazilian court decree
  • 59 per month for each dependent, with no limitation on the number of dependents
  • Brazilian Private Pension Fund contributions, up to 12% of gross taxable income

On the annual federal income tax return, the taxpayer may elect the standard deduction, which is 20% of taxable income up to a maximum deduction of BRL16,754.34, or may deduct the follow­ing amounts:

  • Brazilian Private Pension Fund contributions, up to 12% of gross taxable income.
  • Amounts paid as alimony and pensions in accordance with a court decree.
  • BRL2,275.08 for each dependent, with no limitation on the number of dependents.
  • Social security taxes paid to Brazilian federal, state or munici­pal entities.
  • Payments made by the taxpayer or a dependent for educational expenses, up to an annual limit of BRL3,561.50 for each individual.
  • Payments made during the calendar year to doctors, dentists, psychologists, physiotherapists, phono-audiologists, occupa­tional therapists and hospitals, as well as expenses for labora­tory tests and X-rays, with no limit. These payments are not deductible for income tax purposes if a health plan reimburses the individual for the payments.
  • Payments for medical treatment plans managed by Brazilian companies or by companies authorized to carry out activities in Brazil, as well as payments made to entities to ensure the right to either medical attention or reimbursement for medical, den­tal and hospital expenses.
  • Contributions to cultural and audiovisual activities, sports and the Children’s Fund, up to 6% of income tax due.
  • Payments for the social security system on behalf of a maid who works in the taxpayer’s house (limited to one employee per taxpayer and to an annual amount, which is approximately BRL11,182.20 (amount is disclosed by the local tax authorities).

Ordinarily, a dependent’s medical expenses are deductible on the annual federal return. Expenses that are covered by insurance or reimbursed to the taxpayer are not deductible.

Rates. Federal income tax is levied on taxable income. Under Normative Instruction 1558/2015, the following tax rates apply to monthly taxable income, effective from 1 April 2015.

Monthly taxable income (BRL)


Exceeding             Not exceeding



0 1,903.98 0 0
1,903.98 2,826.65 142.80 7.5
2,826.65 3,751.05 354.80 15
3,751.05 4,664.68 636.13 22.5
4,664.68 869.36 27.5


The following rates apply to annual taxable income.

Annual taxable income (BRL)

Exceeding         Not exceeding



0 22,499.13 0 0
22,499.13 33,477.72 1,687.43 7.5
33,477.72 44,476.74 4,189.26 15
44,476.74 55,373.55 7,534.02 22.5
55,373.55 10,302.70 27.5


For information regarding the taxation of investment income paid to nonresidents, see Investment income.

Relief for losses. If a self-employed person’s business activity shows a loss in one month, the loss may be carried forward to a later month in the same fiscal year (but not into a new year) if the proper supporting documentation is provided.

Estate and gift tax

The Senate has established a maximum estate and gift tax rate of 8%. States may levy estate and gift tax on transfers of real estate by donation and inheritance at any rate, up to 8%. A rate of 4% generally applies in São Paulo. In Rio de Janeiro, the rate is 4.5% for values up to 400,000 UFIR-RJ and 5% for values exceeding 400,000 UFIR-RJ (400,000 UFIR-RJ equals BRL1,200,920; UFIR-RJ is a Fiscal Reference Price). Resident foreigners and nonresidents are subject to this tax on assets located in Brazil only.

For transfers of property through succession, inheritance or dona­tion, the assets may be valued at either market value or the value stated in the declaration of assets of the deceased or donor. For transfers carried out at market value, the excess of market value over the value stated in the declaration of assets is subject to income tax at a rate of 15%.

Social security

Contributions. All individuals earning remuneration from a Brazilian source are subject to local social security tax, which is withheld by the payer. Contributions are levied on employees at rates ranging from 8% to 11%, depending on the level of

remuneration, with a maximum required monthly contribution of BRL570.88. Employers’ contributions are calculated at approxi­mately 26.8% to 28.8% of monthly payroll, without limit. These contributions consist of ordinary social security contributions (20%) plus a percentage from 1% to 3% corresponding to the risk of the activity to the health or safety of the employee and addi­tional social security contributions known as “s” system contri­butions (approximately 5.8%).

The Greater Brazil Plan took effect in August 2011. This plan changed the pricing model of social security contributions in Brazil with respect to the part of the contribution levied by the employer. Under this plan, employers do not pay the ordinary social contribution at a rate of 20% of payroll. Instead, the social security contribution is calculated according to a flat rate appli­cable to the gross revenue of the company, which can vary from 1% to 2%, depending on the sector and the case. The reduction allowed by the Greater Brazil Plan applies only to the ordinary employer social security contribution of 20%.

Self-employed individuals’ contributions are calculated at a rate of 20% of base salary. The base salary is fixed by the govern­ment, and its value depends on when the self-employed individ­ual joined the social security system. The maximum monthly contribution for a self-employed person is BRL1,037.96.

Totalization agreements. Brazil has entered into social security totalization agreements with Argentina, Belgium, Bolivia, Canada, Cape Verde, Chile, Ecuador, El Salvador, France, Germany, Greece, Italy, Japan, Korea (South), Luxembourg, Paraguay, Portugal, Quebec, Spain and Uruguay. Brazil has also signed social security agreements with Switzerland and the United States, but the Brazilian Congress has not yet ratified these treaties.

Tax filing and payment procedures

The Brazilian tax year is the calendar year. Brazil imposes a pay­as-you-earn (PAYE) system. Under the PAYE system, income tax on income received by an individual either abroad or in the coun­try is generally paid monthly through an income tax calculation system known as carnê-ledo. In addition, taxpayers are subject to withholding tax on salary received in Brazil.

Individuals who receive income from more than one source may pay the difference between tax paid or withheld at source and their total monthly tax liability at any time during the fiscal year or when they file their annual federal returns in the year follow­ing the tax year (the deadline for filing tax returns is generally the last business day of April). The balance of tax due is payable either in a lump sum when the return is filed or in eight monthly installments. The installments are subject to interest based on a monthly rate set by the Central Bank of Brazil (approximately 1% per month). Brazilian law does not provide for extensions to file tax returns. Nonresidents are not required to file tax returns.

Income tax on foreign earnings or on earnings received from other individuals in Brazil on which no Brazilian tax is withheld at source must be paid monthly, as described above. The tax is due on the last working day of the month following the month when the income is received. Late payments are subject to penal­ties (at a daily rate of 0.33%, limited to 20%) and to interest (at a monthly rate of approximately 0.75%).

Payments from companies to self-employed persons are subject to income tax withholding at source. The payer must withhold tax at the monthly rates set forth in Section A. If the payer makes several payments to a self-employed person during a month, the tax withheld at source must be calculated using the tax rate for the total amount paid that month.

To make monthly income tax payments, residents must register as individual income tax contributors and obtain a Taxpayer Identification Number (CPF). Disclosure of the CPF number is mandatory in most financial transactions.

Tax on capital gains derived from Brazil is generally not included in the total annual tax liability calculated in the federal return. Instead, tax on capital gains is due on the last working day of the month following the month when the gain is realized. Special rules apply to gains derived from transactions on stock exchanges.

Married persons may be taxed jointly on all types of income if one spouse has no income and is listed as a dependent in the other spouse’s return. In all other cases, married persons are taxed separately on all types of income.

Individuals resident or domiciled in Brazil who hold foreign assets of at least USD100,000 on 31 December of the preceding year must annually declare their holdings of the following mon­etary assets, properties and rights to the Central Bank of Brazil:

  • Foreign deposits
  • Monetary loans
  • Financing
  • Leasing and financial leasing
  • Direct investments
  • Portfolio investments
  • Investments involving derivative instruments
  • Other investments, including real properties and other assets

The due date for the Declaration of Assets and Rights Held Abroad varies each year (usually due by the last business day of March). Penalties are imposed for failing to declare the required information or for submitting inaccurate declarations. Such dec­laration must be filed quarterly, based on the dates of 31 March, 30 June and 30 September, if the total value of the assets and other items that the declarant holds abroad is USD100,000 or more on those dates.

Foreign nationals who were considered residents for tax purposes should apply under the departure process and obtain a tax clear­ance certificate from the Brazilian tax authorities before their definitive departure from Brazil. To obtain such certificate, indi­viduals must file a Departure Communication and a Departure Income Tax Return covering the period of 1 January in the year of departure through the date on which the return is filed and pay all taxes due.

Double tax relief and tax treaties

In general, taxes paid to other countries may offset Brazilian in come tax on the same foreign income, if the other country grants reciprocal treatment for taxes paid in Brazil. Brazil has entered into double tax treaties with the following countries.

Argentina                        Hungary                        Philippines

Austria                            India                              Portugal

Belgium                           Israel                              Slovak Republic

Canada                            Italy                               South Africa

Chile                                Japan                             Spain

China                               Korea (South)                Sweden

Czech Republic               Luxembourg                  Trinidad and

Denmark                         Mexico                          Tobago

Ecuador                           Netherlands                   Turkey

Finland                            Norway                         Ukraine

France                             Peru                               Venezuela

In addition, the Brazilian Federal Revenue and Customs Secre­tariat recognizes that although Germany, the United Kingdom and the United States have not entered into formal tax treaties with Brazil, these countries waive reciprocal tax treatment for individuals who may be subject to double taxation.

Tourist and temporary visas

With exceptions for nationals of countries that border Brazil and nationals of countries that do not require visas of Brazilians, foreign nationals must obtain valid entry visas to enter Brazil.

Tourist visas. Visitors who intend to visit Brazil for recreational purposes and who do not intend to immigrate or take up remuner­ated activities may obtain tourist visas. These visas are valid for up to 10 years (depending on the consulate issuing the visa) and allow various entries into the country for stays of no longer than 90 days per year. Most tourist visas are renewable once each year for an additional 90 days, for a total of 180 days per year. The visa must be renewed before the expiration of the 90 days; other­wise, the holder is subject to a fine. Depending on the nationality, an individual holding a tourist visa can stay in Brazil for up to 90 days in a six-month period.

Temporary visas. The following types of temporary visas are based on the characteristics of the visitor and the trip:

  • Cultural or study trip (valid for one year)
  • Business trip (valid for up to 90 days)
  • Artist or entertainer (valid for up to 90 days)
  • Athlete (valid for one year)
  • Student (valid for up to one year and extendible if the school supplies documents on the student’s performance and enroll­ment status)
  • Scientist, teacher, technician or other professional contracted by a Brazilian company or the government (valid for two years)
  • Correspondent of a newspaper, magazine, radio, television or other foreign news agency (valid for up to four years)
  • Religious work (valid for one year)

Each of these visas might be renewable for an additional equivalent period.

Temporary visas grant their bearers the right to undertake a spe­cific activity. The two most commonly used work-related catego­ries are the business category and the scientist, teacher, techni­cian or other professional category.

Business visas are granted to short-term visitors who visit Brazil for business purposes. The visa allows its bearer to undertake any activity deemed usual and necessary for the purpose of the visit (for example, attending meetings and establishing business contacts).

A business visa does not permit the holder to work for any locally owned or multinational company or organization located in Brazil, nor does it permit the holder to receive any remunera­tion in Brazil for products or services supplied. In all cases, for­eign nationals must obtain residence permits (see Section H) to receive remuneration in Brazil for services provided in Brazil.

A foreign national participating in business meetings under a temporary business visa must have a contract with a non-Brazilian company or individual, and fees must be paid outside Brazil, al­though the foreign national may be reimbursed locally for ex­penses incurred in Brazil.

The terms of business visas vary depending on the degree of reciprocity between Brazil and the home country of a foreign national. In general, business visas are valid for up to 10 years (depending on the consulate issuing the visa) and allow various entries into the country for stays of no longer than 90 days. Tem­porary business visas are renewable once each year for an addi­tional 90 days, for a total of 180 days per year. The visa must be renewed before the expiration of the 90 days; otherwise, the holder is subject to a fine. Depending on the nationality, an indi­vidual holding a temporary business visa can stay in Brazil for up to 90 days in a six-month period.

Work permits

To obtain the most common work permits for their foreign employees, employers must apply for authorization from the Ministry of Labor. The process and documents required depend on whether the visa is based on a service contract between a Brazilian company and a foreign company (temporary technical work permit, or type “V” visa), or whether the visa is for an expatriate employee of a Brazilian company under a local work contract (temporary work visa; also a type “V” visa).

Service contract. If the visa is based on a service contract between a company in Brazil and a company abroad, a temporary technical visa must be obtained. The contractor in Brazil initiates the procedure by applying to the Immigration Division of the Ministry of Labor. If the application is approved, the authoriza­tion is forwarded through the Ministry of Foreign Affairs to a designated Brazilian consulate abroad, where the individual des­ignated in the service contract requests the issuance of the visa in the passport.

To obtain a temporary technical visa under a service contract, the foreign individual and the company must provide certain docu­ments and information. The following are the main documents:

  • Copy of the identification page of the passport (including those of dependents, if they will accompany the applicant to Brazil)
  • Curriculum vitae
  • Declaration(s) proving at least three years of experience in the relevant area
  • Service agreement between the two companies
  • Signatory power document
  • Detailed training plan

If the foreign employee comes to Brazil to render technical ser­vices for up to 90 days, the same type of visa may be obtained for a shorter period directly at the Brazilian Consulate.

Expatriate employee of a Brazilian company. If an expatriate will be an employee of a Brazilian company, the expatriate must apply for a temporary work visa.

To obtain a temporary visa based on a labor contract with a Brazilian company, the individual must file proof of education and professional experience in addition to the passport and cur­riculum vitae.

The employer in Brazil must also file certain documents with the Ministry of Labor, together with an employment contract.

Statutory director of a Brazilian subsidiary. If an expatriate is to be appointed as statutory director (general manager, president or member of the board) of a Brazilian subsidiary of a foreign par­ent company, the company must present proof of an investment of BRL600,000 (registered at the Central Bank of Brazil) for each foreign administrator applying for the permanent visa.

For a foreign individual investor, the authorities grant a perma­nent entrance visa if the registered inbound investment is up to BRL500,000; this limit may be reduced to BRL150,000 if certain requirements are met.

The appropriate visas for statutory directors are permanent visas.

The permanent visas are issued with a validity period of up to five years and may be renewed at the Brazilian Federal Police Department before expiration if the permit holder meets certain requirements.

Residence permits

Foreign nationals who intend to establish permanent residence in Brazil may obtain residence permits. A residence permit allows a foreign national to transfer his or her residency to Brazil for an indefinite period of time, beginning on the date he or she enters the country under the permit.

Self-employment. Foreign nationals may obtain a permanent visa in Brazil as an investor to be able to be self-employed in the country. To obtain this type of visa, both of the following condi­tions must be satisfied:

  • The foreign national must make a minimum investment, which is currently BRL150,000, and register the investment at the Central Bank of Brazil.
  • The investor must present a plan of investment and a commit­ment to create work positions for Brazilian nationals.

The investment amount and the number of work positions referred to above may vary depending on the region where the company is located. In the event of the cessation of the Brazilian business, the investment may be repatriated.

This visa is valid for three years and may be renewed at the Brazilian Federal Police Department before its expiration if the permit holder meets certain requirements.

Brazilian child or marriage. Foreign nationals who have a Brazilian-born child or are married to a Brazilian citizen may apply for a permanent resident visa.

Family and personal considerations

Family members. Working spouses of expatriates must apply for their own work permits. Working expatriates must list their depen­dents when applying for their visas. The dependents listed do not require separate permits to reside in Brazil. The children of work­ing expatriates do not require student visas to attend schools in Brazil.

Only dependents of permanent visa holders may work in Brazil without applying for a separate work permit.

Marital property regime. The Brazilian Civil Code provides for the following marital property regimes:

  • Community property, under which all assets and liabilities of the spouses, whether acquired before or during the marriage, are held in common. Certain exemptions apply.
  • Partial community property, under which assets acquired dur­ing the marriage are held in common.
  • Separate property, under which assets acquired before and dur­ing the marriage are held separately.
  • Final participation in the assets, under which each spouse has his or her own wealth, and in case of divorce, the couple divides only the assets acquired during the marriage.

The above regimes apply to heterosexual and same-sex couples married under the laws of Brazil. The partial community prop­erty regime automatically applies unless the spouses elect one of the other regimes in a prenuptial agreement.

Forced heirship. Under Brazilian law, parents and other relatives must leave a certain percentage of their estates to their direct lineal ascendants and descendants. An individual’s descendants (sons, grandsons and great-grandsons) and ascendants (parents, grandparents and great-grandparents) are entitled to 50% of the individual’s estate. The remaining 50% may be left to testamen­tary heirs. Successions of foreign individuals domiciled in Brazil are governed by Brazilian law if a Brazilian spouse or Brazilian sons survive.

Driver’s permits. Foreign nationals from countries included in the Vienna Convention may drive legally in Brazil with their home country driver’s licenses for up to 180 days. They can also use an international driver’s license. These licenses are usually valid for one year. To drive in Brazil after this period, a foreign national must obtain a Brazilian driver’s license.