Do i need to pay TAX in Brazil ?

Hello ra83sh,

You most certainly will need to file an annual DIRPF - Declaração de Impostos de Renda, Pessoa Física with the Receita Federal. On your delclaration you are REQUIRED to report your foreign income. It will depend completely on the Treaty that exists between Brazil and India, if you will pay taxes here on that income or not, and how much you will be required to pay here.

You will need to consult an international tax specialist to prepare your annual declaration because international taxes are simply too complicated for one to do themselves here in Brazil.

Since you are not paying income tax in the country where the income is being earned, my guess it that you will almost certainly be taxed on it here in Brazil, especially since you are sending around 8k Reais each month back to Brazil. This amount alone is well above the annual exempt limit on earnings. I don't think the question is IF you will be taxed here, but rather HOW MUCH of your foreign income will be subject to income taxes here in Brazil. I think that at the very minimum you're going to get taxed on everything you've sent back here. At worst you may be taxed on your entire foreign income, less the exempt amount here which is around 25K Reais.

Only an international tax specialist is going to be able to give you a definitive answer on this.

Cheers,
James     Expat-blog Experts Team

thanks james. 

so my guess  and worries was real.  i have no idea where i can find an international tax practitioner. i heard like the tax will be 27 %  . so  almost half what i am sending now to brasil will go to Brazilian tax regime ?   

What city does your wife live in? Perhaps I can find somebody to help with your taxes. If I do I'll post the contact information or a link to their website here.

Cheers,
James

thanks james. the city name is cuiaba.

Your wife may want to contact this accounting firm in Cuiabá.

http://servcontonline.com.br/

I don't know them personally so can't make any recommendations, but it was about all I could find doing an online search.

Good luck!

Cheers,
James  Expat-blog Experts Team

thanks james.

Don't put the cash into a "Brazilian" account

stevefunk wrote:

Don't put the cash into a "Brazilian" account

Steve, I hate to be the one to burst your bubble, but it doesn't matter one little bit WHERE you put the money, or even where you EARN it. The law requires permanent residents (i.e. anyone residing in Brazil for more than 180 days) to file an annual DIRPF (Declaração de Imposto de Renda - Pessoa Física). Regardless of where you earn your income, you are required to report any foreign income to the Receita Federal as "World Income" on your DIRPF. Whether or not you get taxed on that income here in Brazil depends completely on wheter or not a Tax Treaty exists between your country and Brazil. If there is no such Treaty then you have no protection whatsoever against double taxation, other than any possible deductions your country may allow for taxes paid to a foreign tax authority.

Cheers,
James      Expat-blog Experts Team

Sure , but he's specifically worried about the money going into his wife's account in Brazil

His wife is a Brazillian, where else is she going to have an account?

Even if he were to deposit to an account in her name in some other country, that just passes off the tax burden to her then, as she would have to declare it on her DIRPF.

Cheers,
James    Expat-blog Experts Team

I got some info from my " research "    here it is

i have to submit Comunicação Definitiva de Saída do País" (CSDP)  after exiting brazil  then  this declaration also o:- "Declaração de Saída Definitiva do País (DSDP), refers to the last statement of Personal Income Tax that the Brazilian citizen should do when you decide to live abroad  (temporary or permanent ).

( this all come into effect only  if a tax resident is away from brazil more than 12 consecutive months.)

after submitting Comunicação Definitiva de Saída do País (CSDP) i am becoming a non-tax resident for a temporary basis. in that period i do not need to pay tax for the income that i earned abroad.

A Comunicação Definitiva de Saída do País (CSDP) is the document that the Brazilian citizen ( i read this as tax resident) must submit to the Internal Revenue Service of Brazil communicating their exit from the country (  temporary or permanent). In other words, this document is to inform the tax authorities that, from a given date, citizens effectively ceased to be resident in the country. so after submitting this to RFB the tax resident is actually exempt from Tax in brasil. if he do not have any income from brasil in this period.

but still i haven't got any clue about my remittance to wife RFB gonna tax it or not.

this is what i understood any more info about this JAmes ?

Hello ra83sh,

Before you do anything else you should check with an immigration lawyer. I'm pretty sure that by filing a CSDP, as an expat this also means giving up your permanent resident status. If it is NOT your intention to ever return to Brazil then that won't be a big deal. If on the other hand you're only planning a temporary absence for work purposes, then you would have to go through the whole headache of re-establishing your RNE/CIE upon returning. When a citizens files a CSDP that absolves them of the tax obligation, but has absolutely no effect on their citizenship. It is not necessarily that way for a non-citizen expat who is registered as permanent. Just remember here in Brazil permanent is not PERMANENT. You will even lose it by being out of Brazil for more than 2 years.

Regardless of where it comes from, the money passed to your wife's account, plus the interest that it generates is going to be taxed. She will have to declare all of it as income because the bank is also required to report all such transactions to the RF as they take place. If she fails to claim these amounts on her DIRPF she can end up in serious problems.

Cheers,
James     Expat-blog Experts Team

hi james

so now i am preparing myself for the tax reality. [ i am doing this for the first time in my entire life]


example.  her salary is just 12000 reais  yearly

and her income from abroad as remittance is 50000 reais

so how much will be the tax ?  an approximate amount? 

do they calculate a flat 27.5 % of 62000 [ total  income] ? or need to  deduct 27000[ Exempt from 
Income Tax]  from this 62000  then for the rest of the amount  35000 @27.5 % tax?  or they calculate 35000@ 22.5 % i am sorry i am just confused can you help me out ?

James wrote:

Hello ra83sh,

Before you do anything else you should check with an immigration lawyer. I'm pretty sure that by filing a CSDP, as an expat this also means giving up your permanent resident status. If it is NOT your intention to ever return to Brazil then that won't be a big deal. If on the other hand you're only planning a temporary absence for work purposes, then you would have to go through the whole headache of re-establishing your RNE/CIE upon returning. When a citizens files a CSDP that absolves them of the tax obligation, but has absolutely no effect on their citizenship. It is not necessarily that way for a non-citizen expat who is registered as permanent. Just remember here in Brazil permanent is not PERMANENT. You will even lose it by being out of Brazil for more than 2 years.

Regardless of where it comes from, the money passed to your wife's account, plus the interest that it generates is going to be taxed. She will have to declare all of it as income because the bank is also required to report all such transactions to the RF as they take place. If she fails to claim these amounts on her DIRPF she can end up in serious problems.

Cheers,
James     Expat-blog Experts Team

No, it is not a flat tax. The tax owing is based on incriments of income earned.  See the link below and look at the THIRD box. It is the tax rates for ANNUAL INCOME.

http://www.guiatrabalhista.com.br/guia/tabela_irf.html

Cheers,
James    Expat-blog Experts Team

hi james

This i copied following guidlines from  here  http://www.receita.fazenda.gov.br/Pesso … nitiva.htm

Caracterização da Condição de Residente no Brasil

Considera-se residente no Brasil, a pessoa física:

1 - que resida no Brasil em caráter permanente;
2 - que se ausente para prestar serviços como assalariada a autarquias ou repartições do Governo brasileiro situadas no exterior;
3 - que ingresse no Brasil:
a) com visto permanente, na data da chegada;
b) com visto temporário:
    b.1. para trabalhar com vínculo empregatício ou atuar como médico bolsista no âmbito do Programa Mais Médicos de que trata a Lei nº 12.871, de 22 de outubro de 2013, na data da chegada;
    b.2. na data em que complete 184 dias, consecutivos ou não, de permanência no Brasil, dentro de um período de até doze meses. (Caso, dentro de um período de doze meses, a pessoa física não complete 184 dias, consecutivos ou não, de permanência no Brasil, novo período de até doze meses será contado da data do ingresso seguinte àquele em que se iniciou a contagem anterior);
    b.3. na data da obtenção de visto permanente ou de vínculo empregatício, se ocorrida antes de completar 184 dias, consecutivos ou não, de permanência no Brasil, dentro de um período de até doze meses;

4 - brasileira que adquiriu a condição de não residente no Brasil e retorne ao País com ânimo definitivo, na data da chegada;

5 - que se ausente do Brasil em caráter temporário ou se retire em caráter permanente do território nacional sem apresentar a Comunicação de Saída Definitiva do País durante os primeiros 12 (doze) meses consecutivos de ausência.

Caracterização da Condição de Não Residente no Brasil


Característica

Condições

não residente no Brasil

1 - que não resida no Brasil em caráter permanente e não se enquadre nas hipóteses do item Conceito de residente no Brasil;

2 - que se retire em caráter permanente do território nacional, na data da saída, com a apresentação da Comunicação de Saída Definitiva do País;

3 - que, na condição de não residente, ingresse no Brasil para prestar serviços como funcionária de órgão de governo estrangeiro situado no País, ressalvado o disposto no item 4 de Conceito de residente no Brasil;

4 - que ingresse no Brasil com visto temporário:

a) e permaneça até 183 dias, consecutivos ou não, em um período de até doze meses;

b) até o dia anterior ao da obtenção de visto permanente ou de vínculo empregatício, se ocorrida antes de completar 184 dias, consecutivos ou não, de permanência no Brasil, dentro de um período de até doze meses;

5 - que se ausente do Brasil em caráter temporário, a partir do dia seguinte àquele em que complete doze meses consecutivos de ausência.

please check , i google  translated  and read so may be my mistake  but  i think  they mentioned who came to brasil with a permanent visa also need to do this CSDP  . but i don't know its gonna affect the RNE or "Permanent visa Status".  any idea ?

The guidelines you've read are ONLY to determine who is or is not considered a resident for tax purposes. They have nothing to do with the permanency process itself.

Basically, anyone who is in Brazil for more than 180 days (legal annual limit for a tourist) is considered a resident for tax purposes, and must file a DIRPF.. Those individuals must continue to file annual returns (if over the exempt salary) until such time as they leave the country and file a CSDP.

When one obtains a VIPER Permanent Visa from a Consulado outside of Brazil, they are considered a resident for tax purposes from the moment they arrive in Brazil. Again this is ONLY for tax purposes and has nothing to do with the permanency process itself.

That said, filing a CSDP may have the effect of cancelling one's permanency application if they file one during the processing of their permanency application. This is something that one must check with the Federal Police, since one may only absent themselves from Brazil for 90 days at a time during processing.

Cheers,
James       Expat-blog Experts Team

so you are basically saying like, csdp and dsdp has nothing to do with RNE status or permanent visa status ?  if i do CSDP my Permanent visa or RNE gonna affect adversely  ? i got my permanent visa before entering brazil (its not under process . i already have  RNE and Viper visa) .  i am asking this because in an earlier reply you suggested me  to get more info  before doing CSDP because it may revoke my RNE or VIPER VISA.

thanks james

For TAX PURPOSES you're a resident from the moment you arrive in Brazil since you already have a VIPER.

What I'm saying is that filing the CSDP to avoid tax liability on leaving Brazil, permanently or temporarily, could very well have the effect of renouncing your permanency. You need to check with the Federal Police and the Receita Federal before you do anything of that kind.

In Brazil permanency is NEVER permanent, it can be cancelled for several reasons. One of those reasons is being outside of Brazil for more than 2 years. You don't want to find out the hard way afterwards that filing a CSDP could possibly be another one of those reasons. While the CSDP is a tax document, it MAY HAVE SERIOUS IMPLICATIONS regarding your permanent visa status, you need to make certain.

Now do you understand?

Cheers,
James  Expat-blog Experts Team

yup crystal clear.

What about if you are resident with VIPER, but you only spend a couple of weeks in any 6 month period i.e. less than 180 days per year.  Is tax still due? Does the 180 have to be continuous?

If you're a permanent resident you have to pay taxes PERIOD.  The 180 day rule is for anyone here whether or not they have documentation, they're considered a "resident for tax purposes", that is quite different from "having permanent resident status" which automatically carries a tax obligation.

You will need not only to report your Brazilian income, but also your worldwide income (so everything you earn in your homeland) and if there is no bilateral Tax Treaty between the two nations, you will likely be taxed on that income here in Brazil too.

Cheers,
James    Expat-blog Experts Team

Very clear answer James, really appreciate your input on this - I'll try an look for a post that hopefully explains what I will need to do in this regard as I expect it will be another difficult time ahead trying to navigate this :-/

Thanks!

How does Brazil keep tabs on "Worldwide income"  ?
Do you have to submit any supporting documents ...

While I don't have any personal knowledge about that, I would presume that you do need to produce supporting documents. Also once you claim such income, most countries do have reciprocal agreements that permit verification.

Cheers,
James      Expat-blog Experts Team

By any chance, are there any links or contacts I could follow up on for research?  Haven't managed to find or understand what I've found so far..  Interested to see what could be done to minimise exposure to double taxation if at all possible.. also do I need to mention my situation to anyone when I arrive in BR with VIPER status?

If you've applied for a VIPER Permanent Visa, outside of Brazil then it is going to be attached to the inside of your passport. The Federal Police Agent who checks you in through Customs & Immigrations is going to see it.

If you're arriving in Brazil on a VITUR Tourist Visa or Visa Waiver Program (VWP) entry and intend to apply for permanency afterwards, then no you don't have to tell them anything.

Cheers,
James    Expat-blog Experts Team

Thank you James, So just to check my understanding, on arrival with VIPER in passport, will they ask me any questions regarding taxation? I'm just trying to forward plan for anything that I need to do regarding this once I set foot on BR soil

All your help and advice very much appreciated James

No the Federal Police won't ask you questions about taxes on arrival. However your are considered taxable from the moment you arrive in Brazil because you're a permanent resident. Since everything you will ever do in this country will involve your CPF number (individual tax number) the Receita Federal will know everything about you.

Cheers,
James    Expat-blog Experts Team

Thank you James

Hi James

I lived in Brazil for some years, married a Brazilian, but am now returned to London I still have an RNE and all that goes with it.

Seeing I've been back here now for a while I am keen to make sure everything is up to date and have been looking at the Saida Definitiva as an option to simplify life.

Can you recommend any tax/legal expert I could get in touch with in Brazil or even London to talk through the intricacies of this and, eventually, guide me through the procedure?

Thank you

Chris

Hi Chris

Please note that you can contact any Contabilidade "accountant" to check on your taxes.

As far as Saída definitiva is concerned, are you planning on cancelling your RNE?

If so I believe you don't require any lawyer to guide you through the process as you can easily contact the Brazilian Embassy and they can explain the procedure to you.

Good luck and please do update us on your adventures

Hi Stanza, thanks for the reply

This is kind of why I want to speak to an expert in the field.

I want to know whether the RNE is cancelled as a result of the Saida process (information online is, as ever, contradictory).

I also want to know what the process would do to the property I own in Brasil, and the income from it. Also my bank account and investments in country.

Further, I can't find a simple explanation of the process itself online, so I wanted someone to walk me through it.

Given the above, I don't think your average empresa de contabilidade is going to be able to help me, hence my request for a specialist in the field.

If you do happen to know anyone, I am happy to pay. I even got in touch with Deloitte and PWC in Rio who didn't seem to want my business. I love Brasil!

Abracos

Try EUROPARTNER Ltda. They have offices in Rio de Janeiro, Fortaleza and Sao Paolo.

They are an accounting and consulting firm.

James wrote:

No the Federal Police won't ask you questions about taxes on arrival. However your are considered taxable from the moment you arrive in Brazil because you're a permanent resident. Since everything you will ever do in this country will involve your CPF number (individual tax number) the Receita Federal will know everything about you.

Cheers,
James    Expat-blog Experts Team

James / any other guru

How does the Brasilian tax regime treat a retired Brit in Brasil, paying full UK tax on pension in the UK ?

atb

Paul

oh my, you're going to pay full double taxes in both countries!

stevefunk wrote:

oh my, you're going to pay full double taxes in both countries!

Me ???

How would that be collected at this end ?

Your taxable income in Brazil will not be taxed double. There is an exemption based on your foreign income. It's best to consult a tax attorney.

Jim

No double taxation.   

Despite the fact that there is no treaty with the UK.   

I am no tax guru, and don't take my word for it.  Just run a search on "reciprocal tax treatment."  You'll find that the UK is one of three non-treaty countries for which you can receive a foreign tax credit locally.

Globally, you'll end up paying the higher tax rate of the two.  But not the two combined. 

Locally, if your UK tax rate is higher, you won't owe a cent in Brazil tax on that income.