Taxes in Brazil

If you are a legal resident of Brazil, you’ll need to file a tax return here. “Resident” here includes foreigners holding permanent visas, and also those holding temporary visas and a work contract. As a general rule, if you are a U.S. citizen residing in Brazil, you’ll still have to file a U.S. return.

Foreigners with tax residence in Brazil must pay tax on income generated in Brazil or elsewhere, unless it is exempted through a double taxation treaty. The United States and Brazil do not have one at this time, though Brazil and Canada do.

Ordinary income is taxed on a graduated scale. Low-income individuals pay no tax, and the maximum marginal tax rate currently is 27.5%. It’s best to consult an accountant in Brazil, but the following passive income sources must generally be reported:

• Interest payments and dividends from foreign sources
• Rents received
• Most investment income
• Income from business activities (except for dividends from Brazilian companies and interest income from savings accounts held in Brazil)

Returns must be filed by April 30 each year, and can generally be done via the Receita Federal website.