Taxes in Brazil are not the same as the UK and the following should be seen as a guide only as tax rates and forms of taxation can change at any time.
For income tax purposes, the fiscal year is the calendar year. However, for an individual, the taxable period is the calendar month, not the year. An annual calendar year tax declaration also is required, and the tax rates are annualised to even out the fluctuations of monthly income.
If you are a tax resident your worldwide income will be subject to personal income tax (at graduated rates up to a maximum of 27.5%).
If you are non-resident, you are taxable only on income from Brazilian sources, at a rate of 25% at source (15% if unearned income). There is no tax on foreign income (i.e., income received abroad), or obligation to file an annual income tax return, until you become resident.
A Brazilian national is always regarded as resident in Brazil unless he or she leaves the country permanently. If you are the holder of a permanent visa or a temporary work permit visa you will be regarded as a resident upon arrival in Brazil.
If you are not a Brazilian national and come to Brazil for any other reason you will be treated as resident for tax purposes if you stay in Brazil for more than 183 days (consecutive or not) in any 12-month period. In such circumstances your initial residence period will start on the day following the date you exceed the 183-day period.
Residence status, once acquired, continues for 12 months after final departure from Brazil unless tax clearance is obtained. This should be obtained when leaving Brazil to become a non-resident.
There are no regional income taxes imposed in Brazil.
Individuals must file their own tax returns. Married couples are taxed jointly on all income if one spouse has no income and is listed as a dependant on the other spouse's return. In all other cases, married couples are taxed separately.
Graduated rates apply to all income except certain Brazilian investment income, which is subject to a flat rate. The rates are the same for married and single individuals.
The following deductions are allowable for all resident individuals:
* Alimony and court-ordered child support.
* Certain pension payments to persons over age 65
* Expenses deductible in computing self-employment income
* Payments made to certain medical professionals and hospitals
* Education expenses (up to a limited annual amount of R$ 1,998)
Resident taxpayers are also entitled to a deduction for their dependents in computing monthly taxable income, and annual taxable.
* A foreign tax credit will usually be claimed on your home country tax return for Brazilian taxes paid on Brazil-source income. Alternatively Brazilian source income may be exempted on your home country return. The method used to mitigate double taxation will depend on your home country’s tax legislation, and the nature of any tax agreement between Brazil and your home country. Non-residents are subject to income tax on Brazilian-source income only. It should be noted that in most cases, the source of payment is used to determine the source of income. Therefore payments made in Brazil will be considered to have a Brazilian source and payments made outside Brazil to have a foreign source, and so non-residents should arrange for payments of income to be structured efficiently. It should be noted that mortgage interest is not deductible in calculating taxable rental income. Capital gains of Brazilian residents are subject to a 15% tax, which is not credited against the liability for the year.
Non-resident individuals are generally subject to a flat rate of 15% on gains of properties located in Brazil.
Note that tax treaties could affect the tax rates described above.
Other taxes in Brazil:
Value Added Tax
Municipal/Local taxes
Inheritance Tax
Stamp Duty