Taxes in Brazil: a complete guide for expats and foreigners
Taxation in Brazil is anchored by a progressive federal income-tax scale that, in 2025, tops out at 27.5 percent while layering social-security and municipal levies on top.
This guide walks expats – especially those from the US – through the essentials of filing obligations, residency tests, and treaty relief so you can navigate taxes in Brasil without falling into double taxation traps.
Whether you draw a salary in São Paulo or run a startup in Recife, the pages that follow map out what Brazilian authorities expect and how those rules interact with your US return.
Brazilian tax system: an in-depth overview
Brazil operates a multi-layered tax system: the federal government (via Receita Federal) collects income, IPI tax, and other nationwide levies, while states and municipalities impose their own consumption and property taxes.
Together, these tiers create a progressive structure in which foreigners and Brazilians alike must track both direct and indirect obligations.
NOTE! All federal returns and payments flow through Receita Federal, which also issues the annual IRPF e-filing program.
Who must pay taxes in Brazil?
Brazilian tax liability hinges on residency status:
- Residents – Individuals who hold a permanent visa, stay 183 days in any 12-month period, or return after temporary absence. They are taxed on worldwide income under the progressive IRPF table and must contribute to INSS where applicable. Foreign tax credits may offset double taxation.
- Non-residents – Those without tax residency are taxed only on Brazil-sourced income: 15% flat withholding (25% if resident in a listed low-tax jurisdiction). No personal deductions apply, but any Brazilian employer withholds at source.
Brazil income tax rates and brackets
Brazil uses a monthly progressive income tax scale (IRPF) to assess salaries, pensions, and self-employment income for residents. The 2025 structure includes a raised exemption threshold aligned with the national minimum wage.
| Monthly income (BRL) | Tax rate | Deduction (BRL) |
|---|---|---|
| 0 – 2,428.80 | 0% | – |
| 2,428.81 – 2,826.65 | 7.5% | 142.80 |
| 2,826.66 – 3,751.05 | 15% | 354.80 |
| 3,751.06 – 4,664.68 | 22.5% | 636.13 |
| 4,664.69 and above | 27.5% | 869.36 |
These monthly brackets apply to all resident taxpayers. The simplified 20% standard deduction (up to BRL 16,754.34 annually) remains available, or you may itemize deductions such as dependents, education, and medical expenses.
Non-residents are taxed at a flat 15% on Brazil-sourced income (or 25% if resident in a tax-haven jurisdiction). No deductions apply to non-residents.
Other taxes in Brazil
Beyond the headline Brazil income tax rate, the Brazilian tax system layers several other levies that affect investments, assets, and everyday transactions. The snapshot below equips expats with the 2025 rules that sit beside income tax on personal income.
Capital Gains Tax
Capital gains are taxed separately from income tax under a progressive scale. For residents, the rate starts at 15% and rises to 22.5% on gains above BRL 30 million; non-residents face the same ladder – or 25% if they live in a listed tax-haven jurisdiction.
Equity trades on the B3 exchange are normally 15% (20% for day-trades), with exemptions for small monthly disposals.
Social Security Contributions (INSS)
- Employees contribute 7.5%–14% of their salary bands up to BRL 8,157.41 (2025 ceiling).
- A US–Brazil Totalization Agreement has been in force since 1 Oct 2018, eliminating double INSS / SECA coverage for most employees and self-employed expats who obtain a certificate of coverage.
- Employers pay a base 20% on payroll, plus ancillary charges that can push the total near 28% depending on risk and sector.
- Self-employed individuals choose regimes from 5%–20% of the ceiling.
Wealth Tax (not applicable yet)
There is no wealth tax in Brazil at present. Bills proposing a 0.5% levy on net assets above BRL 10 million remain pending before Congress. High-net-worth expats should monitor the debate as it resurfaces in each budget cycle.
Property Tax (IPTU)
- IPTU is charged annually at 0.3%–1.5% of the municipal appraised value.
- São Paulo sets a base 1% rate for residential and 1.5% for commercial property.
- Owners are the legal taxpayers, though leases often pass the cost to tenants.
Inheritance and Gift Tax (ITCMD)
ITCMD is a state-level duty on inheritances and donations, currently capped at 8%. The 2025 reform bill would allow progressive brackets up to 16%, so families may benefit from completing transfers before higher ceilings take effect.
US–Brazil tax treaty and double taxation
Living and working in Brazil leaves many American expats juggling two revenue services. Because there is still no US–Brazil tax treaty, taxation in Brazil and the United States can overlap, creating the risk of double taxation. Fortunately, the IRS provides proven tools to neutralise that overlap.
- No formal treaty in place – Brazil and the United States have never signed an income tax treaty, so typical treaty protections are unavailable to expats.
- Use the Foreign Earned Income Exclusion (FEIE) – Qualifying expats can exclude up to $130,000 of 2025 foreign earnings; claim it by attaching Form 2555 to your Form 1040 once you meet the bona fide residence or physical-presence test.
- Or claim the Foreign Tax Credit – File Form 1116 to offset, dollar for dollar, the taxes in Brazil you have already paid; you can blend a partial FEIE with the credit to fine-tune your overall US liability.
NOTE! US citizens residing abroad must file the 2024 federal return by June 16, 2025 (the usual June 15 date rolls to the next business day).
All payments, however, are still due by April 15, 2025, to avoid interest and penalties. Need more time? File IRS Form 4868 or use our free tax extension service to push the paperwork deadline to October 15, 2025.
Important deadlines for Brazillian taxes
Brazil’s tax year aligns with the calendar year – personal income earned from 1 January to 31 December 2024 feeds into the 2025 return, shaping every Brazilian tax burden calculation for residents, expats, and other foreigners.
For the 2025 season, the Federal Revenue Service opened e-filing on 17 March and set the hard filing-and-payment cut-off for 23:59 (Brasília time) on 30 May 2025. Any balance due can be paid in up to eight monthly quotas – the first quota (or the full amount) is also due on 30 May, the second on 30 June, with the remaining quotas closing on the last business day of each month through 30 December and SELIC interest accruing from quota 2 onward.
Miss the window and the Brazilian tax burden rises fast: late returns trigger a 1%-per-month penalty (minimum BRL 165.74, capped at 20% of the tax) plus SELIC interest on unpaid quotas – costs that can quickly erode the personal income of expats and other foreigners who file late.
Steps to filing your Brazilian tax return
Step 1 – Secure a CPF. Apply online through the Receita Federal portal or at a post-office partner; the number is mandatory for every taxpayer in Brazil. Keep the digital receipt, as you will need it each year.
Step 2 – Download Meu Imposto de Renda. Install the Receita Federal software (desktop or mobile) or access the e-CAC web interface. The program can import a pre-filled return to speed things up.
Step 3 – Complete the DIRPF form. Review income, deductions, and assets, then choose the simplified or complete deduction model. Confirm that all figures align with your US records before finalising.
Step 4 – Transmit and obtain the Recibo. Submit directly from the software; it issues an immediate proof-of-filing. Pay any DARF tax slip–or, if you are due a refund, monitor the five-lot calendar inside the app.
Does Brazil tax foreign income?
Yes – residents are subject to Brazilian tax on worldwide income, while non-residents pay tax only on Brazil-sourced earnings. In practice, that means salary, dividends, rental profits, and capital gains earned abroad must be reported on the annual Imposto de Renda return – and, when foreign assets breach Central Bank thresholds, on a separate external-assets declaration.
What you must file if you hold money abroad:
- Annual DCBE (Declaração de Capitais Brasileiros no Exterior) – required whenever your foreign assets exceed USD 1 million on 31 December. File online with the Central Bank between mid-February and 5 April 2025.
- Quarterly DCBE – only if foreign assets top USD 100 million at quarter-end (less common for individuals, but relevant to larger family offices).
- Stay compliant – fines for late, incomplete, or false DCBE information range from R$2,500 to R$250,000, and may be increased by 50% in aggravating cases.
Smart strategies to prevent double taxation
US expats in Brazil can take advantage of the extended US tax deadline (16 June 2025) to finalize Brazilian tax filings and optimize foreign tax credits. Keeping thorough records – such as DARF slips and Central Bank filings – is essential to satisfy IRS proof-of-payment requirements.
Thanks to the US–Brazil Totalization Agreement, most employees and self-employed expats can avoid paying both INSS and US self-employment tax—as long as they obtain a certificate of coverage. Structuring payroll and contractor arrangements around that certificate ensures internationally mobile professionals stay compliant while sharply reducing their combined social-security burden.
Tips for minimizing taxes as an expat in Brazil
- Claim Brazil-specific deductions including INSS employee contributions, unlimited medical expenses, R$2,275.08 per dependent, and up to R$3,561.50 in annual education costs to compress your taxable base.
- Ask your employer to segregate a bona fide housing allowance, so the reimbursement is taxed locally only on the cash received, while the US foreign housing exclusion can shelter qualified rent abroad.
- Where feasible, convert discretionary bonuses into profit-sharing (PLR); the exclusive PLR table is fully exempt up to R$7,640.80 and climbs only to 27.5% at the top tier.
- If you leave Brazil, submit the Declaração de Saída Definitiva by 30 May of the following year to terminate Brazilian residence from your departure date and limit tax to Brazil-source income.
- Combine the 2025 foreign earned income exclusionworth up to $130,000 with foreign tax credits on any residual Brazil tax to neutralize your US liability and avoid double taxation.
- Maintain meticulous records of receipts, rental contracts, and exchange rates to substantiate both Brazil deductions and Form 1116 calculations on your US return.
- Engage a bilingual tax advisor versed in Brazilian and US expat rules to coordinate the timing of income, pension contributions, and PFIC reporting for optimal efficiency.
Need help filing taxes in Brazil?
Balancing Brazil’s tax deadlines with US reporting requirements can feel daunting – but not when TFX is guiding the process.
Thinking about booking a free tax consultation? Our expert team leverages local deductions and US expat benefits to minimize your tax burden and keep you compliant across jurisdictions.
Factual answers to USA expats in Brazil’s questions
Yes – you must obtain a CPF to open local accounts, file the annual IRPF, and access virtually any deduction or refund.
File Brazil’s annual Capitais Brasileiros no Exterior declaration for balances above USD 1,000 and submit FinCEN 114 plus Schedule B with your US return.
Complete the Declaração de Saída Definitiva by 30 May of the following year to end residency and tax Brazil only on pre-departure income.
Yes – monthly gains exceeding R$35,000 attract capital-gains tax of 15% to 22.5% and must be disclosed on your IRPF.
Register as an autônomo or MEI, pay INSS plus monthly Carnê-Leão advances, then reconcile the figures in your annual return.
