Brazil Income Taxes 2023
Last partial update, September 2021.Individual Income Tax: Brazil's individual income tax rates for 2021 are progressive, from 7.5% to 27.5%.
Personal annual tax rates 2021(BRL)
| Income (BRL) | % |
|---|---|
| 1-22,848 | - |
| 22,849-33,920 | 7.5 |
| 33,921-45,012 | 15 |
| 45,013-55,976 | 22.5 |
| Over 55,976 | 27.5 |
Note: Nonresidents pay a flat 25% tax on income earned in Brazil
Corporate Tax: Brazil's combined corporate tax rate for 2021 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: Capital gains of companies are added to the regular income.
Individuals: Pay 15%-22.5% tax on capital gains, dividend income from local companies is tax exempt.
Residence
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.
Brazil Tax Deductions
- Operating losses are carried forward indefinitely.
In future years only 30% of the current year taxable income can be set off against the loss. - There is no carry back of losses.
- 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 capitalisation 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.
Brazil Personal Credits and Deductions
For Brazilian residents, the first annual income of BRL 22,848 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 tax is deducted at source from the following payments to non residents:Dividend- 0%.
Interest- 15%/25%.
Royalties- 15%/25%.
Technical Services -15%/25%.
Social Security
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 pension, 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.
Note: The information in this site is for general guidance only. Users of this site are advised to take professional advice before taking practical tax decisions.
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