At this time of the year, all residents in Brazil—whether they are Brazilian nationals or not— must submit their revenue tax forms. Income tax returns are mandatory and must be sent to the Brazilian authorities between March 7 and April 30, 2019. After the joys of Carnival, the tax man cometh. It is called an “adjustment” tax return as individuals (expats, in this case) already pay income taxes throughout the year, either from their monthly salaries, or paid in regular installments (known as carnê-leão). Each Brazilian taxpayer fills out their return with a summary of their earnings, including specific deductions and arriving at final due payment.
The Brazilian income tax system accounts for both income and property. As well as submitting earnings, each tax resident must also declare all of their assets, including real estate and bank accounts in Brazil and abroad. This declaration of assets is for information purposes only, and due tax is only calculated in accordance with information provided on earnings.
Foreigners and expats may believe that these obligations do not apply to them. However, according to articles 2 and 6 of Brazil’s tax law (IN RFB n° 208/2002), foreigners are also subject to tax obligations in Brazil under the following conditions:
Meanwhile, Brazilian nationals who do not reside in the country are not subject to income taxation in Brazil.
Any taxpayers intending to leave Brazil and settle abroad must first inform the tax authorities. Otherwise, they will remain a Brazilian resident for one year and will still have to pay income tax in this period.
Brazil applies the principle of worldwide taxation. Any income earned by a Brazilian taxpayer, in Brazil or abroad, is taxable in Brazil.
Specific rules may apply for stocks or real estate properties.
The Brazilian legislation allows for rebates on taxes paid abroad and taxes to be paid in Brazil, but only if a bilateral agreement has been signed with the country in question. Brazil has signed such agreements with 29 nations, stipulating that taxes paid abroad may be deducted from the amounts paid in Brazil.
In Brazil, the income tax burden is lower than in most European countries. An income bracket system is used, with highest earners paying 27.5 percent. There are also several deductions available to reduce an individual’s final taxable income.
In summary, filling out a tax return is mandatory if:
New job market data from the Brazilian Institute of Geography and Statistics (IBGE) show the…
Brazil officially had 5.83 million domestic workers in 2022 — almost the entire population of…
Brazil’s Ministry of Health this month announced a purchase of 12.5 million doses of Moderna’s…
In a report to the Federal Police, Brazil's Federal Comptroller General’s Office (CGU) denounced irregularities…
Brazil's Justice Ministry reiterated its support for a decision to recreate the Special Commission on…
In its final episode, our special miniseries on the Brazilian military revisits how the country…