Brazil

Brazilian citizens living in Brazil, naturalized foreign nationals, and foreign nationals holding a permanent visa or a temporary visa under a Brazilian employment contract are residents from their date of entry. Foreign nationals on a temporary visa without a Brazilian employment contract become residents after 183 days of physical presence in Brazil, consecutive or not, within a 12-month period; Brazilians who move abroad remain residents for 12 months after departure unless they file an exit process, in which case they become non-residents immediately.

The Brazilian tax year is the calendar year. Residents must file an annual tax return by the last business day of May of the following year, with no extensions available; spouses may file jointly or separately. Income tax is otherwise withheld or paid monthly during the year, and any balance due under the annual return is payable at once or in up to eight monthly instalments starting on that same May deadline.

15% — Non-resident individuals are taxed only on their Brazilian-sourced income, at a flat rate of 15%, rising to 25% for residents of jurisdictions Brazil treats as tax havens; no deductions are allowed. Rental income from Brazilian-located property is taxed at 15%, and income received abroad by non-residents is tax-exempt.

Itemized deductions from taxable income include amounts per dependant, alimony payments, tuition expenses, unlimited medical expenses, Brazilian social security contributions, and private pension contributions up to a share of gross income. Taxpayers may instead take a standard deduction of a capped percentage of gross taxable income in lieu of itemizing, and may separately deduct qualifying donations and cultural or sports investments directly from the tax due, within capped limits.

Profit-sharing distributions paid by companies to employees are taxed at source under a separate progressive schedule from other income, rather than being combined with regular monthly income. Such payments may be made at most twice a year, with a minimum of three months between payments.

An individual's net gains from selling shares on Brazil's stock exchange or over-the-counter market are exempt from income tax when total monthly disposals of that asset class do not exceed BRL 20,000. The exemption does not cover day-trade operations, equity-index-fund unit trades, investment-fund or club redemptions, or share disposals from option exercises or forward-contract settlement.

Brazil's monthly BRL 35,000 exemption for individuals' crypto-asset disposal gains continues to apply only to crypto-assets custodied or traded through institutions located in Brazil. Since 1 January 2024, gains on crypto-assets custodied or traded through institutions located abroad are instead taxed under the foreign-financial-investment regime of Law 14,754/2023, which carries no equivalent exemption.