Perspectives

Tax Treaties and totalization agreements

Brazil has an extensive network of tax treaties designed to minimize any double tax exposure resulting from an international assignment. 

Last update in September/2017

Income

Brazil has an extensive network of tax treaties designed to minimize any double tax exposure resulting from an international assignment. The tax treaties cover the double taxation of income and the application of the tax treaties and the interpretation of the rules can be quite complex. As a result, we recommend you contact your tax adviser before making any decisions based upon applying the treaty rules.

List of Income Tax Treaties

Countries with an Income Tax Treaty
Argentina Hungary Portugal
Austria India Slovak Republic
Belgium Israel South Africa
Canada Italy South Korea
Chile Japan Spain
China Luxembourg Sweden
Czech Republic Mexico Trinidad and Tobago
Denmark Netherlands Turkey
Ecuador Norway Ukraine
Finland Peru Venezuela
France Phillipines  
  1. The Tax Treaties to avoid double-taxation entered with Paraguay and Russia have not yet been approved by the Brazilian National Congress (so, not in force).
  2.  USA, United Kingdom and Germany have tax treatment reciprocity, it means that a tax paid in one country might be offset against the income tax due in the other country, or vice-versa, if conditions are met.

Copies of the text of the tax treaties can be found on the Federal Tax Administration’s website.

Totalization Agreements

The foreign professional that comes into Brazil to be appropriated in the corporate acts as an administrator of the local company (permanent visa) is not considered as an employee of the Brazilian company, and, therefore, there are no labor charges and the individual is not entitled to the labor benefits.

On the contrary, for social security purposes, the administrator is considered as an “individual taxpayer” and his contributions to the Brazilian social security must be monthly withheld from his local compensation by the local paying source. The rates regarding the social security contribution ranges from 8% to 11%. The tax basis is the earned salary.

However, in case Brazil had entered into an International Social Security Treaty with the original country of the taxpayer, the rules set forth in the Treaty can be observed, and that can result in the payment of the social security contribution in only one country or in the commutation of the benefits covered by the Treaty.

Brazil entered into Social Security Totalization Agreements with the following countries:

Bilateral Agreements

Bilateral Agreements
Belgium France  Italy Portugal
Canada Germany Japan South Korea
Cape Verde Greece Luxembourg Spain
Chile       

 

Multilateral Agreements

Multilateral Agreements - Iberoamerican
Bolivia Paraguay
Chile Portugal
El Salvador Spain
Ecuador Uruguay

 

Multilateral Agreements - Mercosul
Argentina
Paraguay
Uruguay  

Note: The Social Security Totalization Agreements entered with Korea, Quebec and Switzerland have not yet been approved by the Brazilian National Congress (so, not in force). 

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