| Monthly Income (BRL) | Tax Rate |
| 0 to 1862.22 | 0% |
| 1868.23 to 2799.86 | 7.5% |
| 2799.87 to 3733.19 | 15% |
| 3733.20 to 4664.68 | 22.5% |
| 4664.69 over | 27.5% |
Brazil Income Tax Rate for Individual Tax Payers
Lowest Rate is 7.50% and Highest Rate is 27.50%
| Yearly Income (BRL) | Tax Rate |
| 1to 21453 | 0% |
| 21454 to 32151 | 7.5% |
| 31152 to 43869 | 15% |
| 43870 to 53566 | 22.5% |
| 53566 over | 27.5% |
Tax Rates for Non Residents in Brazil is 27.50% tax on Income Earned in Brazil
Corporate Tax in Brazil
Brazil's combined corporate tax rate for 2014 additional is 34%. The tax consists of a basic tax of 15%. There is also a surtax of 10% for annual income of over BRL 240,000, about $ 110,000. Additional 9% are added for social contribution on net profits.
Capital Gains Tax in Brazil
Capital gains of companies are added to the regular income.
Individuals Pay 15% tax on capital gains, dividend income from
local companies is tax exempt.
Residential Status in Brazil
A foreign company is resident if incorporated in Brazil.
An individual is resident when holding a permanent visa, or a temporary visa with an employment agreement, or even without an employment agreement, when staying in Brazil for more than 183 days within 12 months.
Tax Deductions in Brazil
Operating losses are carried forward indefinitely. In future years only 30% of the current year taxable income can be set off against the loss.
Depreciation is deducted using the straight line method. Companies working in 2 shifts can claim 150% of the standard rates, while companies working in 3 shifts are entitled to 200% of the standard rates.
Companies involved in development of technical research can use accelerated depreciation for tax purpose.
There is no company consolidation for tax purpose.
Thin capitalization rules relating to interest expenses are in effect in Brazil from 1.1.2010.
In general the related party debit to equity ratio must not exceed 2:1 ratio.
Personal Credits and Deductions in Brazil
For Brazilian residents, the first annual income of BRL 21,453
is tax exempt.
There is a standard monthly deduction for each dependant.
Education expenses are deductible, up to a limit.
Deductions are also permitted for social security payments by an
employee, payments to private Brazilian pension plans, up to a
limit, and for alimony payments.
Deduction of Tax at Source in Brazil
In Brazil tax is deducted at source from the following payments
to non residents:
Dividend- 0%.
Interest- 15%/25%.
Royalties- 15%.
Services -15%/25%.
Social Security Contributions in Brazil
The contributions by the employer and the employee are subject
to ceiling defined by law.
Employer: 36.8% of the gross salary, 28.8% social security and 8% for severance fund.
Employee: 8% -11% of the gross salary. The employee's payment, which is capped, is based on a "contribution salary table", provided by the government.
tax returns due date 30 April.
Tax Year End 31 December.
Compliance requirements for tax returns in Brazil
The taxpayer is required to file his/her tax return by the 30
April of the year following the end of the taxable year. There
is no provision for an individual to obtain an extension of time
for filing the return. Late filed returns are subject to penalty
and interest. Any balance due with the annual tax return must be
paid on 30 April. However, the taxpayer is given the option to
pay the balance in six monthly installments, subject to interest
charges, beginning on the final filing date.
Residents
The following are considered as resident taxpayers:
naturalized foreigners
foreigners, holders of permanent visa (since they arrive in
Brazil)
foreigners, holders of temporary visa with a local employment contract, arriving in Brazil, since the date of arrival foreigners, holders of temporary visa without a local employment contract, arriving in Brazil after completing 183 days of stay in Brazil, counted within any 12-month period.
Resident taxpayers are subject to pay income tax in Brazil on
their worldwide (global) income, on a monthly cash basis.
Resident taxpayers are subject to withholding tax system on
their Brazilian-sourced income based on a progressive tax table.
They are also subject to the Brazilian monthly income tax on the
sum of their offshore income (wages, compensation, interests,
dividends, rental income, capital gains, and so on) and to file
annual Brazilian income tax returns.
Resident taxpayers are required to pay monthly income tax
on their income that was not subject to withholding tax by other
local source. Generally, it means offshore income and rental
income received from other individuals. This tax is also
calculated based on a progressive tax table that has three
rates: 0 percent, 7,5%, 15 percent, 22,5% and 27.5 percent. The
payment has to be effected up to the last business day of the
following month.