|Monthly Income (BRL)||Tax Rate|
|0 to 1862.22||0%|
|1868.23 to 2799.86||7.5%|
|2799.87 to 3733.19||15%|
|3733.20 to 4664.68||22.5%|
Brazil Income Tax Rate for Individual Tax Payers
Lowest Rate is 7.50% and Highest Rate is 27.50%
|Yearly Income (BRL)||Tax Rate|
|21454 to 32151||7.5%|
|31152 to 43869||15%|
|43870 to 53566||22.5%|
Tax Rates for Non Residents in Brazil is 27.50% tax on Income Earned in Brazil
Corporate Tax in Brazil
Brazil's combined corporate tax rate for 2014 additional is 34%. The tax consists of a basic tax of 15%. There is also a surtax of 10% for annual income of over BRL 240,000, about $ 110,000. Additional 9% are added for social contribution on net profits.
Capital Gains Tax in Brazil
Capital gains of companies are added to the regular income.
Individuals Pay 15% tax on capital gains, dividend income from local companies is tax exempt.
Residential Status in Brazil
A foreign company is resident if incorporated in Brazil.
An individual is resident when holding a permanent visa, or a temporary visa with an employment agreement, or even without an employment agreement, when staying in Brazil for more than 183 days within 12 months.
Tax Deductions in Brazil
Operating losses are carried forward indefinitely. In future years only 30% of the current year taxable income can be set off against the loss.
Depreciation is deducted using the straight line method. Companies working in 2 shifts can claim 150% of the standard rates, while companies working in 3 shifts are entitled to 200% of the standard rates.
Companies involved in development of technical research can use accelerated depreciation for tax purpose.
There is no company consolidation for tax purpose.
Thin capitalization rules relating to interest expenses are in effect in Brazil from 1.1.2010.
In general the related party debit to equity ratio must not exceed 2:1 ratio.
Personal Credits and Deductions in Brazil
For Brazilian residents, the first annual income of BRL 21,453 is tax exempt.
There is a standard monthly deduction for each dependant.
Education expenses are deductible, up to a limit.
Deductions are also permitted for social security payments by an
employee, payments to private Brazilian pension plans, up to a
limit, and for alimony payments.
Deduction of Tax at Source in Brazil
In Brazil tax is deducted at source from the following payments to non residents:
Social Security Contributions in Brazil
The contributions by the employer and the employee are subject to ceiling defined by law.
Employer: 36.8% of the gross salary, 28.8% social security and 8% for severance fund.
Employee: 8% -11% of the gross salary. The employee's payment, which is capped, is based on a "contribution salary table", provided by the government.
tax returns due date 30 April.
Tax Year End 31 December.
Compliance requirements for tax returns in Brazil
The taxpayer is required to file his/her tax return by the 30 April of the year following the end of the taxable year. There is no provision for an individual to obtain an extension of time for filing the return. Late filed returns are subject to penalty and interest. Any balance due with the annual tax return must be paid on 30 April. However, the taxpayer is given the option to pay the balance in six monthly installments, subject to interest charges, beginning on the final filing date.
The following are considered as resident taxpayers:
foreigners, holders of permanent visa (since they arrive in Brazil)
foreigners, holders of temporary visa with a local employment contract, arriving in Brazil, since the date of arrival foreigners, holders of temporary visa without a local employment contract, arriving in Brazil after completing 183 days of stay in Brazil, counted within any 12-month period.
Resident taxpayers are subject to pay income tax in Brazil on
their worldwide (global) income, on a monthly cash basis.
Resident taxpayers are subject to withholding tax system on their Brazilian-sourced income based on a progressive tax table. They are also subject to the Brazilian monthly income tax on the sum of their offshore income (wages, compensation, interests, dividends, rental income, capital gains, and so on) and to file annual Brazilian income tax returns.
Resident taxpayers are required to pay monthly income tax on their income that was not subject to withholding tax by other local source. Generally, it means offshore income and rental income received from other individuals. This tax is also calculated based on a progressive tax table that has three rates: 0 percent, 7,5%, 15 percent, 22,5% and 27.5 percent. The payment has to be effected up to the last business day of the following month.