Brazil

The social security contribution table applicable for 2024 was updated by an Ordinance, dated January 11, 2024, issued by the Brazilian social security authorities (see the Other taxes section for more information). The progressive income tax table applicable from February 2024 was updated by Law 14,848, dated May 1, 2024 (see the Taxes on personal income section for more information).

Brazil is negotiating new totalisation agreements (see the Foreign tax relief and tax treaties section for more information), including Bulgaria, China, India, Switzerland, and the Portuguese speaking countries Multilateral Agreement (Brazil, Angola, Cabo Verde, Guinea Bissau, Mozambique, Portugal, Sao Tome and Principe, and East Timor).

Regarding the report of overseas assets in Brazil (Annual Income Tax Return and Brazilian Central Bank reporting), there is an Agreement between Brazil and the United States (US) whose main objective is the exchange of financial information between the countries. This occurs through the tax authorities, which can exchange data with regards to balances in checking and saving accounts, earnings from financial investments, brokers, and insurance accounts. Further information (e.g. information related to real estate purchased abroad by Brazilians) may also be requested but is not automatically provided.

Law 14,973, dated September 16, 2024, established a new Special Regime of Taxation and Foreign Currency Regularization which creates a legal mechanism for voluntary declaration by individuals and companies of their resources, assets or rights of lawful origin kept in Brazil or abroad, undeclared or declared with omission or inaccuracy in relation to essential data, or repatriated by residents or entities domiciled in the Country. Income tax will be levied at a rate of 15% on the set amount subject to regularization as capital gain.

Law 14,754 was published on December 13, 2023, and provides for the taxation of income earned by individuals resident in Brazil with financial investments, qualified controlled entities and trusts abroad. With regard to income from financial investments and profits earned by qualified controlled entities, such income is subject to annual taxation by the Personal Income Tax at a flat rate of 15% starting January 1, 2024, separately from other income and capital gains, with no deduction being applied to the tax base.

Law 13,445 issued in May 2017 (‘New Migration Law’) has formally revoked the ‘Foreigner Statute Law’ (Law 6,815/1980), defining the rights and duties of Brazilian migrants and the legal situation of foreign individuals in Brazil. Its main purpose is to ensure equal rights and opportunities to foreigners as if they are Brazilian citizens, as well as to simplify the procedures for entrance and residence in Brazil. With respect to the latter, the Law has created new types and characteristics for allowable visas, extended the coverage conditions for the temporary visa, and introduced a new authorisation for residence.

The Brazilian government is currently considering proposing a tax reform that will change the rules applicable to individual and corporate taxes. Once a final text of the bill is reached, it will be submitted for discussion and approval by the Brazilian Congress.