Staying too long - resident taxes

Hi.
If i works for a US company full time remotely, have zero business or income in Brazil, stay over 183 days in a house i own, and a citizen of both countries:

1. Do both governments automatically know i am in Brazil and resort to each other?

2. Does the US or Brazil report to my employer?

3. How do that know how long I'm in the country?

4. Is this audit based or absolutely they (Brazil and the US) will go after every current of both countries who reside in Brazil?


Thanks.
-@OzneSil

You're a citizen of Brazil but you're asking if you're overstaying in Brazil?

@essxiv for tax purposes, yes. Will both governments know I'm spending more than the 183 day rule, etc.? See questions above...

12/04/22 @OzneSil

1. "Both governments" are huge entities that consist of a lot of independent agencies. Homeland Security's Customs and Border Control in the US and the Justice Ministry's Polícia Federal have records of all of your entries and exits for the US and Brazil. They can share them with each other on criminal matters of mutual interest, like drug trafficking, money laundering, tracing people with open INTERPOL warrants, etc., but that happens by request, not automatically. They can also share the data on request with their respective tax authorities, US Internal Revenue Service and Brazilian Receita Federal, but again, that's usually as part of ongoing investigations of "Persons of Interest", not fishing expeditions to detect randos.
2. Your employer reports your income to the tax authorities of the country where it operates; it will only report it to a second country if you request that.
3. If you're a dual citizen of the US and Brazil, there's no limit on how long you can be in either country. The length of your current stay is the number of days since your last entry.
4. Audits are random for people of moderate income who aren't suspected of any criminal activity. Nobody becomes a target just for being in the country.

Brazilian banks do report account activity up their own regulatory chains, eventually to the Central Bank of Brazil. The Receita Federal can access this information during the course of investigations, but I doubt that many investigations start with it.

After you earn in Brazil or bring into Brazil R$28,559.70 in a year, or R$2,379.97 per month, you may be subject to Brazilian Income Tax on your income over those points. Whether you are or not, and to what extent, is something to discuss with an accountant in Brazil, as I suggested to you back in October in Post #8 in this thread: https://www.expat.com/forum/viewtopic.p … 79#5527444

You should always base your tax decisions on discussions with competent professionals, not on what you read from people on the internet, regardless of how well-meaning the advice.

OzneSil...

as to the question of where you are living, its simple.  Both the USA and Brazil have absolute evidence of where you are based upon your passport.  Unless you managed to pass through the border illegally, they know where you are at all times.  And if you are illegal, sooner or later they will catch up with you ....

Well explained!!! Thanks.

Sounds like I don't need to sweat it too much. But I do want to do the right thing.

Being such a gray area is the issue.

When you ask a corporation in the US, for instance, to allow you to work remotely overseas they generally give you the: we will support you for a short period including visas, plane tickets, relocation costs...

They don't consider the fact that a citizen of both doing this on their own volition do not need visas or support with plane tickets.

Make sense,m it cookies cutter takes on this maybe for fear of them (companies) being taxed in

12/04/22 Well explained!!! Thanks.

.

Make sense,m it cookies cutter takes on this maybe for fear of them (companies) being taxed in

-@OzneSil

That's absolutely true. It's very easy for a company to run afoul of a country's tax laws if it's paying someone in a country without have a "tax entity" in that country. Setting up a tax entity in Brazil is a complicated and expensive proposition, and I'm sure that a lot of companies would rather just let an employee go, no matter how good, than put themselves through the hassle of setting up a Brazilian payroll for him or her.

The Digital Nomad visa seems like one way to get around that complication; another way is third-party payrolling services, which I believe exist in Brazil, although they take a cut from both the employer and the employee.

@abthree large corporations that already have a presence in Brazil shouldn't have an issue with that, right?

Does the IRS notify them? And again, only if i got audited?

12/04/22 @abthree large corporations that already have a presence in Brazil shouldn't have an issue with that, right?
Does the IRS notify them? And again, only if i got audited?
-@OzneSil

A large corporation that already has a presence in Brazil would probably transfer you to the payroll of the Brazilian affiliate.  The Brazilian affiliate would then report your income to the Receita Federal, and you would do your Brazilian taxes before your US taxes, and deduct most or all of your Brazilian taxes on your US return, netting out with a much reduced US tax liability, or none at all. 

I think the OP has received some very good, nuanced responses.

I would just add that, from a top-down point of view, unbelievably  Brazil and the USA do NOT have in force a Bilateral Tax Treaty.  Despite all the historical commercial ties between companies and individuals of the two countries.  And that's a bad thing, because of all the ensuing double taxation - along with all the additional tax paperwork required by both countries.

However, with zero benefit to taxpayers and of potential great benefit to the respective governments, Brazil and the USA signed a Tax Information Exchange Agreement in 2007.  This was extremely controversial in Brazil, and wasn't ratified by the legislature or signed into law until 2013.  Then, a year later, this exchange of taxpayer information was expanded to conform to FATCA, the US-promulgated Foreign Account Tax Compliance Act, which monitors US taxpayers' financial transactions abroad.

https://br.usembassy.gov/brazil-and-the … formation/

I think @abthree makes an excellent point distinguishing between automatic vs requested exchanges of information.

Along those lines, my understanding is that FATCA exchanges are automatic, but perhaps more pertinent to the OP, one would have to check the language in the TIEA to see if tax exchanges there are upon request, or pre-programmed.   I would suspect the former, but if of concern to the OP would be worth a look.

@Marcos999 Hi Marcos, thank you for the information. Where can I look this up? Are you investigating it as well, sounds like you are?