Expatriation contract : Split salary : part paid in country of origin

Hello,

I will be moving soon to Brazil close to Sao Paulo.
Currently negotiating my expatriation contract, I would like my company to split my salary to be paid part in my country of origin and part in Brazil in reals.
This would mitigate the possible impacts of the exchange rate fluctuations during my expatriation.
My company seem to say that it is difficult but I have heard through friends that other companies proposed such contracts.

Thanks in advance for your tips, experiences, questions

:)

Hi jfpetitnivard,

What makes it extremely difficult are two factors, the first being Central Bank rules regarding transfer of funds out of Brazil (extremely bureaucratic) and the second being the most complex set of Tax Laws in the civilized world.

Even if you were able to negotiate such a deal, I highly doubt that it would be to your financial advantage considering the taxes and fees involved with foreign transfers. The fees and taxes would gobble up any possible savings that currency fluctuation (or the lack thereof) would generate, then too you must consider the currency exchange rates. It would also have no affect whatsoever on your tax situation. The taxes would have to be paid on the entire amount here in Brazil, even if you were to attempt to declare the foreign part income in that country you would still have to declare your total World Income and if you cannot prove that taxes were not paid on those funds in your home country they would certainly be taxed here in Brazil.

Cheers,
William James Woodward - Brazil Animator, Expat-blog Team

Thank you wjwoodward.
The purpose of this is not to evade tax, but to keep part of my salary which corresponds to my savings directly in my home country.
Instead of saving in Brazil, and then making the money transfer when I eventually move back after my expatriation : all at once.
With the potential risks that could have if the exchange moves in the wrong direction in the mean time.

Your best option, given the situation in Brazil, would be to receive your entire salary in your home country by way of direct bank deposit. Then simply access the funds you need here using your ATM card. If you deal with an international bank that operates in both countries such as HSBC or Citibank for example you have much more flexibility since you can use all of their ATMs and those connected to their network. Otherwise you can only make international ATM transactions at the main branches of Banco do Brasil and this is a real inconvenience.

In order to receive your salary at home I would think you would have to work out some kind of contract that would indicate you are an employee of your home country company "on loan" or temporarily assigned to the Brazilian operation. You would of course still require a Brazilian work visa and you'd need to check the tax implications, regarding where you actually declare the income and pay the tax.

Given the laws here, I don't think you really have too many options. Spitting your salary sounds almost impossible so the bottom line is that you'll have to decide where it's more advantageous to receive the bulk of your income, here or there. Kind of brings the old saying, "you can't HAVE your cake and EAT it too," to mind.

Cheers,
William James Woodward - Brazil Animator, Expat-blog Team