Wait, I Have to Pay Taxes in Brazil?

For many foreigners, living in Brazil is the ultimate dream. Sandy beaches and tropical vibes all come to mind. What many fail to realize, however, is that a stay in Brazil could end up costing a pretty penny. If you’re in Brazil for any considerable length of time, you should be aware of the potential tax consequences.

It’s expected that foreigners with a permanent visa or work contract would pay taxes (and they do). But even tourists must pay taxes if they stay long enough. A visitor who enters Brazil with a temporary visa is deemed a tax resident after 184 days in the country during a 12 month period.

Imagine you enter Brazil on January 1, 2020. On July 2nd you’ll become a resident for tax purposes. Simple, right?

Not so fast. The 184-day calculation doesn’t require a continuous stay. Rather, it’s 184 days in any 12 month period of time. So every time you leave and enter Brazil you’ll need to start counting again.

It’s important to plan because becoming a taxpayer in Brazil can have significant consequences. Brazil, like the US, collects taxes on one’s worldwide income. This means you might actually end up in a double taxation situation if you already pay taxes in a country that doesn’t have a tax treaty with Brazil.

The next time you start dreaming of living in Brazil for a while, just take a few minutes to really think it through. A little planning will go a long way.