Brazil - Tax Guide for Freelance Contractors
Welcome to our guide to Brazilian Taxation. You will find a wealth of information which will be useful if you plan to work in, or place consultants in, Brazil.
Our tax guides give a general overview of the actual taxation rates and rules at the time of writing. There are of course many ways to legally reduce tax or social security burdens in Brazil. Please contact us for more information or an actual breakdown of your situation, and to find out more about our range of payroll and contact management services in Brazil.
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Brazilian Income Tax
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Tax residents in Brazil: are liable to pay Brazilian tax on their worldwide income,
Non tax residents in Brazil: are liable to pay tax only on their Brazilian source - income
Individuals will be regarded as tax residents:
- if they reside in Brazil permanently,( i.e. has a habitual abode available in Brazil),
- if they enter Brazil under a permanent visa, where the intention is to remain in Brazil (will be deemed resident as of the date of entry),
- if they enter Brazil under a temporary visa (1) to work under an employment relationship as of the date of entry, or (2) remain in Brazil for more than 184 days, consecutive or not, within a 12-month period or (3) receive a permanent visa within 12 months following arrival in Brazil, even if before the completion of the 184-day period, consecutive or not.
Taxable income includes:
- worldwide earnings arising from capital or work,
- gains realized upon the disposal of assets or asset rights.
- wages, salaries and any other type of compensation and benefits received by an employee from an employer,
- benefits in kind valued at their cost to the employer or at market value.
Certain deductions are permissible for 2012 including:
- alimony and child support payments under a court order or judicially validated settlement,
- for each qualifying dependant, an amount equal to BRL 164.56,
- social contributions paid to the National Institute of Social Security (INSS)
- contributions paid to qualifying Brazilian private pension funds amongst others.
Income tax rates for 2012:
- No tax is levied on monthly income up to BRL 1'637.11
- 7.5% from BRL 1'637.11 up to BRL 2'453.50,
- 15% from BRL 2'453.51 up to BRL 3'271.38,
- 22.5% from BRL 3'271.39 up to BRL 4'087.65,
- 27.5% over BRL 4'087.65.
Non residents are taxed at a flat rate of 25% on earned income or 15% on other income except dividends paid from a Brazilian entity, which are tax exempt.
Capital gains are subject to a flat 15% rate.
Filing date:
By the last business day of April of the following year.