Personal Income Tax in Brazil

Find out about taxation on income in Brazil. Information on who qualifies for resident and non-resident taxation, as well as standard income tax rate guidelines...

Foreigners resident in Brazil (and all Brazilians as well) are subject to personal income tax known as imposto de renda das pessoas físicas - IRPF. This tax is a Union tax and payment is collected by the Federal Government. In April, taxpayers must also report their annual income in annual tax returns.

The Ministry of Finance (Receita Federal do Brasil - RFB, a specific department) is responsible for the collection of the IRPF.

In accordance with Brazilian legislation, a foreigner working in Brazil is considered resident if:

  • On the date of arrival in Brazil the foreigner has a permanent visa
  • On the date of arrival in Brazil, the foreigner has a temporary visa, (i) to work under a labor contract; (ii) on the 184th day, consecutive or not, of his stay in Brazil, within a 12-month period; or (iii) on the date he obtains a permanent visa or a labor contract, if this occurs before the 184th day of his stay in Brazil, within a 12-month period.

Income tax is payable by any resident individual (pessoa física) who receives more than R$ 23,499.15 in the tax year from a salaried job, non-salaried job, pensions, rental activity or rural activity. Employers are required to withhold income tax and there are cases of certain streams of income in which the individual is required to self-assess the income tax and pay it directly.

The tax is collected on all income, including wages, bonds, commissions, prizes and other forms of remuneration. Housing expenditures and student fees amongst others are classified as an indirect wage and are taxable.

How to submit an income tax declaration and pay income tax

Individual tax returns must be filed with the Ministry of Finance (Receita Federal) as follows:

  • Online: A downloadable progamme (Programa Gerador da declaração) is made available by the Ministry of Finance (Receita Federal) that allows taxpayers to calculate their taxes, fill in the forms and file their returns. 

Note: Declarations and payment made online must be completed before 23h59min59s (Brasília time) annually on 30 April. Payments after this time are considered late. The tax returns filed on diskette and through forms (Formulário) at the post office (Correios) are not accepted anymore.

  • Find further information on paying IRPF and the fines for late payment: Click here (in Portuguese)

Brazilian tax legislation allows deductions on the IRPF for the following paid expenses:

  • Social security contributions paid to the National Institute of Social Security
  • Spousal maintenance payments
  • Dependents - deductions are available for dependents (including spouse, children, parents and others)
  • Education expenses of both the tax filer and their dependents (limited to R$3,091,35 each year)
  • Some health expenses, including doctor, dentist and laboratory fees, psychologists, hospitals and x-ray examinations

These expenditures should be recorded and deducted from reported taxable income when the annual adjustment is made.

The monthly anticipated payments of the IRPF are calculated and collected in accordance with the table below:

Progressive table to the monthly calculation of the tax on corporate income for the financial year 2013, calendar year of 2012.

Monthly Salary (R$) Percentage (%) Deduction (R$)
1.637,11 - -
1.637,12 to 2.453,50 7.5 122.78
2.453,51 to 3.271,38 15 306.80
3.271,39 to 4.087,65 22.5 552.15
Above 4.087,65 27.5 756.53

Progressive table to the monthly calculation of the tax on corporate income for the financial year 2014, calendar year of 2013.

Monthly Salary (R$) Percentage (%) Deduction (R$)
1.710,78 - -
1.710,79 to 2.563,91 7.5 128.31
2.563,92 to 3.418,59 15 320.60
3.418,60 to 4.271,59 22.5 577
Above 4.271,59 27.5 790.58

Progressive table to the monthly calculation of the tax on corporate income for the financial year 2015, calendar year of 2014.

Monthly Salary (R$) Percentage (%) Deduction (R$)
1.787,77 - -
1.787,78 to 2.679,29 7.5 134.08
2.679,30 to 3.572,43 15 335.03
3.572,44 to 4.463,81 22.5 602.96
Above 4.463,81 27.5 826.15

Non-residents individuals are taxed IRRF (at source) of 25 percent for any type of work carried out in Brazil.

Brazil has double taxation treaties with some countries to ensure that those with income tax liability in another country don't also pay in Brazil or vice versa on the same income. Income tax paid in another country on the same source of income can be deducted from the IRPF due in Brazil when the annual adjustment is made. There are set limits (dependent on the amount of money earned abroad) to the the deduction that can be claimed.

Disclaimer
Every effort has been made to offer information that is current, correct and clearly expressed. The information in this summary is intended to be no more than a general overview of the position and certain details have been deliberately omitted. The contents of this page should not be taken as an authoritative statement of Brazilian law and practice. Neither the author nor the publisher are responsible for the results of actions taken on the basis of information contained in this summary, nor for any errors or omissions. This text is not intended to render legal, accounting or tax advice. Readers are encouraged to seek professional advice concerning specific matters before making any decision.

Prepared by, Antonio Amendola, partner, Felsberg e Associados At: Av. Paulista 1294, 2nd floor, Cerqueira Cesar, 01310-915 e-mail