Brazil Counsel

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Avoiding Double Taxation of Income

Like it or not, you’ll pay taxes on your worldwide income in Brazil. That includes anything you make in the US or anywhere else outside Brazil. But all hope isn’t lost. You might be able to reduce your tax burden by amounts paid in foreign taxes.

The first step is to check whether there’s a tax treaty between Brazil and the other country where you’ve paid taxes. HERE’s a list of the countries that have tax treaties with Brazil to avoid double taxation.

If there’s no treaty, then you’ll want to see if there’s reciprocal tax treatment. This means the foreign country provides reduced tax obligations over Brazilian income as well. Figuring this out might require a bit more knowledge of tax law or a consultation with a tax professional.

In some cases, the Brazilian government may require that you supply backup documents proving reciprocity. Americans, however, can rest easy. It’s not necessary to provide any proof of reciprocal tax treatment if you’ve paid federal income taxes to the United States, Germany, or the United Kingdom. 

Assuming you meet one of these two requirements, you could potentially reduce your tax liability in Brazil up to the amount in taxes paid over your non-Brazilian income. Keep in mind that you can’t reduce the taxes on your Brazilian sourced income, if any. This will always be taxed in full in Brazil.

And finally, any taxes for which you’re seeking compensation in Brazil cannot be subject to a refund or credit. Payment must be final.