The tourist visa is granted to people who wish to enter Brazil for tourism or to visit friends or relatives. The trip can not be made for the purposes of immigration, neither may the holder of such a visa work in Brazil or receive remuneration of any form. For example, someone coming to Brazil on a business visit or to attend a professional congress should apply for a visa for this express purpose.
When the tourist arrives at the airport or other point of entry in Brazil, he will normally receive permission to stay for 90 days, which can be extended once for an equal period of time. To extend the visa, a petition must be made to the Federal Police Department before the initial visa expires. The tourist must demonstrate means of support for the subsequent 90 days, and hold a valid return ticket.
Making a short visit as a non-tourist
Business trips and attendance at fairs and congresses are covered by a non-resident short-stay business visa similar to a tourist visa. Some businessmen do in fact travel and enter Brazil on tourist visas, and while frequently this may go unnoticed they are always running the risk that their visa status may be questioned. Officially speaking, a businessman entering Brazil with a wrongly-declared tourist visa risks being refused entry and forced to fly home on the next plane. The short-stay business visa is appropriate for the following purposes:
- Making business contacts, interviews, demonstrating samples, negotiating, etc.
- Evaluating markets;
- Making preparatory contacts that may or will lead to establishing a company in Brazil;
- Attending fairs, congresses, etc.
- Speaking at congresses, seminars, etc (without payment in Brazil).
Temporary Residence Visa
Brazil issues temporary residence visas under a number of specific circumstances. These have differing durations (see ?Length of stay? below) but have certain features in common - they involve considerably more bureaucracy than the simple tourist or business visas, they entitle the visitor to bring in household items, although with the requirement to re-export them on departure. Also, they are issued for a specific activity and limit the holder?s ability to change jobs once in the country. The principal situations in which a foreigner may apply for a temporary residence visa are:
- For a cultural trip;
- As a professional entertainer or sportsman;
- As a welfare worker;
- As a student;
- As a business executive, scientist, teacher, technician or other professionally qualified person, under contract or rendering services to a company in Brazil, or to the Brazilian government;
- As a foreign correspondent for a newspaper, magazine, radio, television or news agency;
- As a minister of religion, member of a consecrated order or equivalent.
Holders of any temporary visa with a validity period of over 90 days must register with the Federal Police within 30 days of their entry into Brazil. They will be issued identity documents to be used during their stay. This registration can be effected only once the foreigner is in possession of the authorization for temporary residence, issued by the Brazilian Consulate abroad.
Where the visa is for a business executive, scientist, teacher, technician or other professionally qualified person who will be under contract or rendering paid services to a company in Brazil, or to the Brazilian government, ou sem v?nculo de emprego, the company in Brazil initiates the procedure by applying to the Immigration Division of the Ministry of Labor. If the application is approved the documents are forwarded via the Foreign Ministry to a designated Brazilian Consulate abroad, where the potential employee will complete the remaining bureaucratic steps of the process.
For temporary work visas appropriate to the majority of businessmen, the following regulations apply:
Applicants who will be formally employed in Brazil will be required to demonstrate suitable educational qualifications and/or work experience. Where the applicant holds a degree from a recognized university, he will be required to present his diploma and proof of two year?s relevant work experience. Where the applicant does not hold a degree, he must demonstrate at least nine years? formal education and three years? work experience.
Note that Article 352 of the Consolidation of Labor Laws provides that all industrial or commercial corporations with three or more employees must maintain a minimum of two-thirds of Brazilian employees in their work force. The same applies to the total payroll - the salary paid to foreigners may not exceed 1/3 of the total payroll. Exceptions are (a) foreigners who have lived in Brazil for more than 10 years and have a Brazilian spouse or offspring, and (b) Portuguese citizens.
Applicants who will not be formally employed - for example, those providing a contractual paid service - must provide suitable documentary evidence of the relationship. However, a longstanding requirement that such contracts must be registered as formal technology transfer deals with the National Institute for Industrial Property is required. This category includes persons working under exchange agreements or similar arrangements.
Note that university degrees, other educational diplomas, letters from current or former employers and all other such documents must be notarized in their country of origin and then presented to the Brazilian Consulate in that country for re-notarization by Brazilian authorities. Applicants are cautioned to allow plenty of time to complete the process.
Tax information guide on going to Brazil
This detailed Q&A guide has been split into 6 key areas in order to help you find the information you need ? quickly and easily!
Before/Once you arrive
Q. Do I need a work permit to work in Brazil?
A. Yes. A work visa must be obtained at the Brazilian consulate or embassy that has jurisdiction over the place from where you are coming. Requirements for obtaining the visa include a valid passport, a work contract with a Brazilian entity, proof of subsistence in Brazil usually in the form of a statement provided by the Brazilian employer, a police statement of no criminal record and a medical examination. All documents not in Portuguese may be required to be translated into Portuguese.
An expatriate working in Brazil must hold either a permanent or temporary visa; an expatriate who holds a temporary visa cannot change employers in Brazil without permission. On application, visas will be issued to the expatriate's dependent spouse and children when the expatriate's visa is issued. A number of conditions must be satisfied before the appropriate visa is issued.
Note that all visa applications must first be submitted to the immigration authorities in Brasilia, before the expatriates are allowed to get them at the Brazilian consulate.
Q. Should I complete any documentation upon arrival in Brazil?
A. Upon entering Brazil, you must obtain an identity card, the national register of foreigners or Registro Nacional de Estrangeiros (RNE), at the Federal Police. Also, a work book or Carteira de Trabalho (CT) is required from the Labor Department, and a tax identification card (CPF/CIC), from the Ministry of Finance.
Q. Should I open an offshore bank account or is it OK to have an account on the Brazilian mainland?
A. Offshore accounts do not create tax efficiencies for residents of Brazil, although one may be useful from a home country tax perspective. Non-residents of Brazil are subject to tax on Brazil-source income only and payments made in Brazil are usually considered Brazilian-sourced. Receipt of income into an offshore account is therefore tax efficient for non-residents of Brazil.
Tax - Basics
Q. What is the tax year?
A. For income tax purposes, the fiscal year is the calendar year. However, for an individual, the taxable period is the calendar month, not the year. An annual calendar year tax declaration also is required, and the tax rates are annualised to even out the fluctuations of monthly income.
Q. How will I be taxed in Brazil?
A. If you are a tax resident your worldwide income will be subject to personal income tax (at graduated rates of maximum of 27.5%).
If you are non-resident, you are taxable only on income from Brazilian sources, at a rate of 25% at source (15% if unearned income). There is no tax on foreign income (i.e., income received abroad), or obligation to file an annual income tax return, until you become resident.
Q. How is tax residence determined?
A. A Brazilian national is always regarded as resident in Brazil unless he or she leaves the country permanently. If you are the holder of a permanent visa or a temporary work permit visa you will be regarded as a resident upon arrival in Brazil.
If you are not a Brazilian national and come to Brazil for any other reason you will be treated as resident for tax purposes if you stay in Brazil for more than 183 days (consecutive or not) in any 12-month period. In such circumstances your initial residence period will start on the day following the date you exceed the 183-day period.
Residence status, once acquired, continues for 12 months after final departure from Brazil unless tax clearance is obtained. This should be obtained when leaving Brazil to become a non-resident.
Q. Are there any regional or state taxes?
A. There are no regional income taxes imposed in Brazil.
Q. Can I file a joint tax return with my spouse?
A. No. Individuals must file their own tax returns.
Married couples are taxed jointly on all income if one spouse has no income and is listed as a dependant on the other spouse's return. In all other cases, married couples are taxed separately.
Q. What rate of tax will I pay in Brazil?
A. Graduated rates apply to all income except certain Brazilian investment income, which is subject to a flat rate. The rates are the same for married and single individuals.
Q. Can I claim a tax deduction for charitable contributions?
A. The full amount of qualified charitable contributions to approved Brazilian charities is allowed as a credit against tax liability, subject to a limit of 6% of the total tax liability.
Q. Are any other tax deductions available?
A. The following deductions are allowable for all resident individuals:
- Alimony and court-ordered child support.
- Certain pension payments to persons over age 65
- Expenses deductible in computing self-employment income
- Payments made to certain medical professionals and hospitals
- Education expenses (up to a limited annual amount of R$ 1,998)
Resident taxpayers are also entitled to a deduction for their dependents in computing monthly taxable income, and annual taxable. For 2004 this deduction is R$ 106 per dependent per month.
Q. I will also be paying tax in my home country. Am I being taxed twice?
A. No. A foreign tax credit will usually be claimed on your home country tax return for Brazilian taxes paid on Brazil-source income. Alternatively Brazilian source income may be exempted on your home country return. The method used to mitigate double taxation will depend on your home country?s tax legislation, and the nature of any tax agreement between Brazil and your home country.
Tax - Administration
Q. Do I need to file a Brazilian tax return?
A. All tax residents who earn in excess of a fixed amount per year must file a Brazilian Tax Return.
All tax residents holding assets and investments (including shares) located abroad must also present a specific declaration (the so called ?Capitais Brasileiros no Exterior ? CBE?) to the Brazilian Central Bank disclosing such assets and investments. Failures or omissions will be subject to heavy penalties. The due date for the declaration is the last working day in May of the year following the applicable tax year.
Q. When does it need to be filed?
A. Taxpayers must file income tax returns by the last working day of April of the year following the applicable tax year.
Q. Can the filing deadline be extended?
Q. What is the procedure for paying tax?
A. Brazil has a system of monthly withholding from income. Payments must also be made by the taxpayer in respect of income not subject to withholding.
In general, individuals with income that is not subject to withholding (in the case of expatriates, this includes offshore compensation, interest, dividends, rents, etc., but not capital gains) are subject to a monthly payment of income tax (carn? le?o) calculated at the monthly rates. The advance payment must be paid on or before the last working day of the month following the month when the income was received. Payments are made via voucher at any commercial bank. The advance payment is credited against the liability of the annual income tax.
Withholding and carn? le?o are both calculated using the monthly tax rates on monthly taxable income (gross less allowances for dependents, social security, etc.). An individual may compute the tax on income subject to and not subject to withholding reduced by the tax actually withheld to arrive at additional total tax due. This computation method eliminates the duplication of the lower rates. If this method were not used, the underpayment would be due with the annual return.
When the annual return is filed, the liability is determined, and the balance due can be paid in one lump sum or divided into six monthly payments. When the instalment method is chosen, the first payment is without interest and the remaining five payments are subject to interest at the monthly average rate of federal treasury bonds (SELIC).
Tax - Income from employment
Q. Will non-cash compensation be taxable (e.g. housing)?
A. Housing allowances or company-provided housing are taxable to an employee at graduated rates.
Other benefits received by an employee from an employer, such as moving expenses, home leave, language lessons and use of a car may not be fully taxable if structured in certain ways.
Q. I will be working in different countries while living in Brazil. Will all of my employment income be taxable in Brazil?
A. Residents of Brazil are subject to Brazilian income tax on worldwide income regardless of the source of that income.
Non-residents are subject to income tax on Brazilian-source income only. It should be noted that in most cases, the source of payment is used to determine the source of income. Therefore payments made in Brazil will be considered to have a Brazilian source and payments made outside Brazil to have a foreign source, and so non-residents should arrange for payments of income to be structured efficiently.
Tax - Other
Q. Will I pay Brazilian tax on investments and rental income generated in my home country?
A. Residents of Brazil are subject to tax on worldwide income, although foreign tax relief is available under tax treaties, when applicable, or unilaterally under Brazilian tax laws.
Foreign tax credits are allowed in Brazil in accordance with the terms of a specific treaty. Unilaterally, a resident in receipt of non-Brazilian-source income may credit the income tax paid to the foreign countries against the Brazilian income tax on such income, provided that the country taxing the income grants reciprocal relief to its residents for Brazilian tax on Brazilian-source income. A credit for foreign taxes cannot exceed the amount of Brazilian tax on that income.
It should be noted that mortgage interest is not deductible in calculating taxable rental income.
Q. Does Brazil have a Capital Gains Tax regime?
A. Capital gains of Brazilian residents are subject to a 15% tax, which is not credited against the liability for the year. Gains from the sale of securities on a public stock exchange are subject to a tax rate of 20%. The tax is paid on a payment voucher at a bank in the same manner as tax on income not subject to withholding. Individuals are not entitled to relief for losses against other income, but are allowed, under certain limits, to net gains and losses from sales of securities on a Brazilian public stock exchange.
The following capital gains are exempt from tax:
- Gains from the sale of a unique real estate, provided that a similar sale has not taken place in the previous five years and the total value of the sale does not exceed a specified amount (R$ 440,000 in 2004).
- Amounts received from the sale of assets with a sales price of less than R$ 20,000 per month.
- Amounts received from the sale of securities on a Brazilian public stock exchange with a sales price of less than R$ 4,143.50 per month.
- Assets sold during a period of Brazilian residence which were acquired during a non-resident period.
Non-resident individuals are generally subject to a flat rate of 15% on gains of properties located in Brazil.
Note that tax treaties could affect the tax rates described above.
Q. What do I need to know about any other tax regime, e.g. Inheritance, Estate or Wealth tax?
A. VALUE ADDED TAX - Brazil imposes a tax on the circulation of merchandise and on transportation and communication services (ICMS), which is similar to value added taxes in other countries. A general rate of 18% applies, with specific rates for a number of goods (for example, 25% for luxury goods).
MUNICIPAL/LOCAL TAX - Municipalities may levy a service tax on certain businesses, a real estate transfer tax (2% on transfers of real estate), and an annual urban real estate tax on property owners.
INHERITANCE/WEALTH TAX - Brazil does not impose any inheritance or wealth taxes. However, individual states may impose a death transfer and donation/gift tax. For example, the state of Sao Paulo adopted an inheritance and gift tax, effective 1 January 2001.
STAMP DUTY - Privately owned offices called Cart?rios provide notorial types of services as well as registers of real estate deeds and recognizing signatures on many types of documents. These cart?rios charge amounts according to the legislation in force which vary from a few cents for simple certified copies to thousands of Reais (R$) for real property deeds. Included in the fees charged for real property transfers by these cart?rios are transfer taxes which vary from two to four percent of the declared value. Cart?rios also register births, marriages and deaths. Expatriate assignees will almost certainly require the services of a cart?rio.
Q. Will I be required to pay Brazilian Social Security?
A. This will depend on the country you are coming from.
Brazil has entered into social security agreements with Argentina, Cape Verde, Chile, Greece, Italy, Luxembourg, Portugal, Spain and Uruguay. Although there are no exemptions from social security contributions, the treaties enable employees spending less than a year in Brazil and paying Brazilian contributions to qualify for benefits in the other countries.
Social security taxes are imposed on employees and employers. A rate of 8% to 11% is imposed on the employee?s monthly salary, up to a maximum monthly wage base. Effective January 2004, the maximum monthly wage base was R$ 2,400 (employee?s maximum monthly contribution is therefore R$ 264.00).
Q. Are social security contributions deductible for tax purposes?
A. Yes. The monthly contribution to the national social security system is deductible by an individual in computing monthly taxable income, and annual taxable income.
This document has been prepared based on the legislation and practices of the country concerned as at 01 March 2004. Income tax legislation and administrative practices may change, and this document should be regarded as a summary guide rather than as a substitute for consultation with your appropriate in-country tax contact.