Brazilian Tax Law

Brazil has a progressive tax system on earned income and flat taxes on capital gains and corporate income.

The Federal Constitution of Brazil establishes the Brazilian Tax System under Articles 145 to 162 and details which taxes may be created and which level of government may create them. Article 146 outlines the general tax authority and is referred to as the Federal Tax Code.

Individual Income Tax

Brazil assesses taxes on individual earned income at a progressive sliding scale, with rates ranging from 7.5 percent on those earning 17,209 real to 27.5 percent on those earning more than 42,984 real as of July 2010. Those earning less than 17,209 are exempt. Individuals also pay a flat rate of 15 percent on capital gains, such as stock dividends.

Corporate Income Tax

Corporations are levied with a 15 percent basic income tax, an additional 10 percent for any annual income of more than 240,000 real, and another 9 percent "social contribution." Corporate capital gains are included in the company's annual profit. Therefore, companies earning more than 240,000 real annually pay 34 percent in taxes.

Residency Requirements

Any individual is considered a resident and subject to tax laws if holding a permanent visa or a temporary work visa, or if she is physically in Brazil for 183 days within any consecutive 12 months.

References

• Wordwide Tax Information: Brazil Tax Laws and Tax System