Income Tax

Foreigners resident in Brazil (and all Brazilians as well) are subject to personal income tax known as imposto de renda das pessoas físicas - IRPF.

This tax is a Union tax and payment is collected from the Federal Government at the source. In April, taxpayers must also declare their annual income.

The Ministry of Finance (Receita Federal do Brasil - RFB) is responsible for the collection of the IRPF.

In accordance with Brazilian legislation, a foreigner working in Brazil is considered resident if:

• On the date of arrival in Brazil the foreigner has a permanent visa
• On the date of arrival in Brazil the foreigner has a temporary contract of employment with a Brazilian company

Income tax is payable by any resident individual (pessoa física) who receives more than R$15,764.28 (as of January 2009) in the tax year from a salaried job, non-salaried job, pensions, rental activity or rural activity.

The tax is collected on all income, including wages, bonds, commissions, prizes and other forms of remuneration. Housing expenditures and student fees amongst others are classified as an indirect wage and are taxable.