Brazil

Residents of Brazil are taxed on their worldwide income, and non-residents are taxed exclusively at source on their Brazilian-sourced income. The source of income is determined by the place where the income payer is located, irrespective of where the work is performed.

For reference, non-resident taxpayers are taxed only on Brazilian-earned income at a flat rate of 15% (25% for residents in tax haven jurisdictions or lower rates provided for in double taxation treaties) and no deductions are allowed. Rental income received from a Brazilian-located property is taxed at 15%. Income received abroad by non-residents is tax-exempt.

Personal income tax rates

Resident taxpayers who receive income from Brazilian sources are subject to withholdings. Resident taxpayers who receive income from non-Brazilian sources (e.g. through split payroll arrangement) or from individuals (e.g. rental income) are subject to mandatory monthly tax payments on amounts not subject to withholdings.

The monthly income tax is calculated based on the following progressive rates (in reais or BRL) as of February 2024:

Alternative income taxes

Law 12,832 (20 June 2013), changing Law 10,101/2000, which regulates profit sharing distributed to employees, establishes that such distribution is subject to income tax at source, separately from other income earned by the beneficiary, as follows:

• A new specific progressive table applicable only for profit sharing paid by companies to its employees, which is valid starting February 2024:
  
  

• There is the possibility for the employee to use the alimony paid as a discount on profit sharing or on their normal salary.
• The maximum payment frequency is twice a year, considering a minimum period of three months between payments.

Local income taxes

There are no provisions for local, state, or provincial income taxes in Brazil.