Whether you are a foreign national living in Brazil or a Brazilian living abroad, seeking specialist advice is essential to ensuring your taxes are in order. This guide explains the nuances of the Brazilian tax system
Understanding how the Brazilian tax system works is essential whether you are moving to Brazil, investing from overseas or a Brazilian national living abroad. The system is progressive, documentation driven and increasingly aligned with global transparency rules.
This guide explains the key elements of Brazilian taxation, including residence rules, income tax, dividend tax, capital gains and property taxes. It also addresses what Brazilian nationals need to know when they relocate overseas.
This article provides general information about the Brazilian tax system. It is not tax advice and should not be relied upon to make decisions. Tax treatment depends on your specific circumstances and local advice is essential.
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The Brazilian tax year runs from January to December. Tax returns are completed in the following March and April.
For example, the year commencing 1st January 2023 and ending 31 December 2023 is called Ano-Calendário 2023. The tax return for that year should be submitted between March and April 2024, under the Exercício 2024.
Individuals will file their Imposto de Renda Pessoa Física (IRPF) using a software released yearly from Receita Federal do Brasil.
Tax residence determines whether you are taxed only on Brazilian-source income or on your worldwide income.
You are normally considered tax resident if you:
Brazilian nationals who relocate abroad must complete an official declaração de saída definitiva (final departure declaration) to cease tax residence. Without this filing, they remain taxable on worldwide income.
Non-residents are taxed only on Brazilian-source income, generally at fixed withholding rates. Certain categories, such as rental income or services performed in Brazil, have specific tax rules.
Brazil operates a progressive personal income tax system with a top rate of 27.5 percent. Income is reported annually, though most employees also pay tax through monthly withholding.
The government is implementing a reform package to increase the monthly exemption threshold to approximately BRL 5,000, subject to final approval. This aims to reduce the tax burden on lower-income residents.
High-income earners face compensatory measures through a newly created minimum tax.
Recent reforms introduced a minimum effective tax on high annual incomes.
Key points:
This change significantly affects executives, entrepreneurs and globally mobile professionals who manage income across jurisdictions.
For many years Brazil did not tax dividends, which made Brazilian corporate structures attractive. This has now changed.
From 2025, most dividends paid to non-residents (and certain domestic recipients) are subject to 10 percent withholding tax.
Foreign investors and expatriates should review cross border structures and double taxation agreements to determine how this applies.
Capital gains rules differ for residents and non-residents.
Residents pay tax on worldwide capital gains at progressive rates that take into account the size of the gain.
Non-residents generally face fixed rates on Brazilian-source gains. Gains from Brazilian real estate, shares and business interests are all potentially taxable.
Brazilian tax law also contains specific rules for gains realised through offshore entities, which can be complex and require specialist advice.
Brazilian companies pay a combination of corporate income tax and social contribution on profits, leading to a typical combined rate of around 34 percent.
Multinational groups operating in Brazil are now subject to rules aligned with the OECD Pillar Two framework, introducing a 15 percent global minimum effective tax for large groups.
Indirect Taxes and VAT Reform
Brazil is overhauling its complex system of indirect taxes, which currently include:
These will gradually be replaced by a dual VAT-style system:
The transition is planned between 2026 and 2033, with both old and new taxes running in parallel for several years. This reform will affect consumer pricing, supply chains and cross border operations.
Property ownership and rental activities attract several taxes.
Municipal authorities charge IPTU on urban property based on the property’s assessed value. Rates vary widely by city.
Rural landowners pay ITR, with rates dependent on land use and size.
Residents must report rental income from Brazilian and overseas properties.
Non-residents renting out Brazilian property face withholding tax, usually at a flat rate, depending on the type of rental arrangement.
Property sales can trigger capital gains tax for residents and non-residents, although exemptions may apply for primary residences or reinvestment.
If you are Brazilian and move overseas, you should file:
These filings:
Brazilians living abroad must also review:
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