Brazil Tax Guide
Everything you need to know about taxes as an expat in Brazil.
Disclaimer
This guide is for informational purposes only and does not constitute tax advice. Always consult with a qualified tax professional for your specific situation.
Overview
Brazil uses a progressive income tax system with rates from 0-27.5%. The absence of a US-Brazil tax treaty creates unique challenges for American expats, requiring careful planning to avoid double taxation. After 183 days in Brazil (within any 12-month period), you become a tax resident with worldwide income subject to Brazilian taxation. A 2026 reform exempts income up to R$5,000/month (~$925 USD).
Tax Residency Rules
**183-Day Rule:** Foreign nationals become Brazilian tax residents after 183 days (consecutive or not) within any 12-month period, at which point worldwide income becomes taxable. **Permanent Visa Holders:** Automatic tax residency from day one of arrival—no grace period. **Temporary Visa with Employment:** Tax resident from entry date if holding employment contract. **Digital Nomad Visa:** No special exemption—after 183 days, worldwide income is taxable at standard rates. **Exit Requirements:** Must file Communication of Definitive Exit (CSD) by last business day of February following departure, plus final income tax return. Failure to file maintains tax residency for 12 months after departure.
Income Tax Rates
| Income Range | Tax Rate |
|---|---|
| 0 - 2,259 | 0% |
| 2,259 - 2,827 | 7.5% |
| 2,827 - 3,751 | 15% |
| 3,751 - 4,665 | 22.5% |
| 4,665+ | 27.5% |
Capital Gains Tax
Progressive rates from 15% to 22.5% depending on gain amount. **Cryptocurrency (effective June 2025):** Flat 17.5% on all gains—previous R$35,000 exemption was eliminated. Real estate gains taxed at 15% with some exemptions for primary residence.
Property Tax
Property tax (IPTU - Imposto Predial e Territorial Urbano) ranges from 0.3% to 1.5% of assessed value annually, varying by municipality. São Paulo and Rio de Janeiro tend toward higher rates. Rural property subject to ITR federal tax.
VAT / Sales Tax
ICMS (state VAT) ranges 7-25% depending on state and product category; standard rate around 18%. PIS/COFINS federal contributions add 3.65-9.25%. Total indirect tax burden can exceed 30% on some goods—this is why imported products are expensive in Brazil.
Special Tax Regimes
Simples Nacional
Simplified tax regime for small businesses with annual revenue up to R$4.8 million. Single monthly payment covers multiple taxes at reduced rates.
MEI (Microempreendedor Individual)
Micro-entrepreneur regime for individuals earning up to R$81,000/year. Fixed monthly payment of ~R$70 covers taxes and provides INSS benefits.
Lucro Presumido
Presumed profit regime for companies with revenue up to R$78 million. Simplifies calculation by presuming profit margin.
For US Expats
**CRITICAL: No US-Brazil Tax Treaty** The absence of a bilateral tax treaty creates significant double taxation risks for Americans: - No reduced withholding rates on dividends, interest, or royalties - No treaty-based exemptions for employment income - No tie-breaker rules for dual residence - Must rely on unilateral relief mechanisms (FEIE or FTC) **CPF Requirement:** Brazil's 11-digit taxpayer ID is required for bank accounts, property purchase, contracts, cell phones, and any significant financial transaction. Obtain at Brazilian consulate or in-person at Banco do Brasil. **FATCA Compliance:** Brazil signed an IGA with the US in 2014. Brazilian banks (Bradesco, Itaú, Santander, Nubank) generally accept US persons with W-9 and US TIN documentation. **US-Brazil Totalization Agreement:** In effect since October 2018, eliminating dual Social Security taxation. Work credits can be combined to qualify for benefits in either country. **Common Mistakes:** Not tracking 183-day threshold; failing to file FBAR/Form 8938 (penalties up to $10,000+ per violation); using FEIE when FTC is better; ignoring monthly Carnê-Leão requirements; not filing exit declaration.
Foreign Earned Income Exclusion (FEIE)
**FEIE Fully Applicable in Brazil** Americans in Brazil can use the Foreign Earned Income Exclusion to exclude up to $130,000 (2025) from US taxation. **Requirements:** - Physical Presence Test: 330 full days in foreign countries during any 12-month period, OR - Bona Fide Residence Test: Resident of foreign country for entire tax year **Limitations:** - Only covers earned income (not dividends, interest, capital gains, pensions, Social Security) - Self-employment tax (15.3%) still applies to self-employment income - Cannot reclaim FEIE for 5 years if revoked **FTC Alternative:** Foreign Tax Credit may be more advantageous if Brazilian taxes exceed FEIE benefit, particularly for higher earners or those with investment income.
Tax Treaty Benefits
**No Tax Treaty Benefits Available** Without a US-Brazil tax treaty, Americans cannot claim: - Reduced withholding rates (standard Brazilian rates apply) - Treaty-based exemptions - Tie-breaker provisions for dual residence **Workarounds:** - Maximize FEIE for earned income - Use FTC for income not covered by FEIE - Structure investments to minimize Brazilian-source passive income - Consider timing of residency establishment
Filing Deadlines
Brazilian tax year is calendar year (January 1 - December 31). Annual income tax returns due by last business day of April. Monthly Carnê-Leão payments due by last business day of month following income receipt for foreign-source income.
Recommended Approach
**Essential: Hire a Brazilian Accountant** Given the language barrier (Portuguese-only tax system), complex foreign income reporting, and monthly Carnê-Leão calculations, professional help is essential. **Typical Costs:** - Basic Brazilian return: R$500-2,000 (~$100-400) - Expat-specialized services: $500-3,000+ - Combined US/Brazil coordination: $1,500-5,000+ **Key Actions:** 1. Track your days carefully to know when you trigger tax residency 2. Register for CPF before or shortly after arrival 3. File monthly Carnê-Leão once tax resident 4. Continue filing US returns (Form 1040, FBAR, Form 8938 if applicable) 5. Coordinate with both US and Brazilian tax professionals 6. File exit declaration if leaving Brazil permanently
Need Help with Your Taxes?
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