Brazil Taxes Non-Residents Too

Brazilian tax law starts with a simple rule: residents pay taxes. If you’re considered a fiscal resident of Brazil, you’re subject to tax on your worldwide income. That includes wages, dividends, and capital gains. It doesn’t matter where the money comes from.

But even non-residents may owe taxes in Brazil. That’s because Brazil also taxes income that’s considered Brazilian-sourced. If money is earned from a Brazilian asset or business, it’s taxable in Brazil. This applies even if the recipient lives abroad.

Real estate is the most common example. If you own property in Brazil and rent it out, the rental income is taxed locally. It doesn’t matter whether you live in the US, hold only a tourist visa, or never set foot in Brazil. The income comes from a Brazilian source, and the government wants its share.

The same is true for other types of Brazilian-sourced income. Profits from selling Brazilian real estate are subject to capital gains tax. Income from royalties received in Brazil is subject to withholding tax. And inheritances received in Brazil are subject to gift and inheritance tax. In each case, the tax is due in Brazil because the income originates there.

So while tax residency determines how much of your global income is taxed in Brazil, the source determines whether any of your local earnings are taxed. If you own assets or earn money in Brazil, don’t assume that being a non-resident lets you off the hook. Brazil’s Federal Revenue Service (Receita Federal) may think otherwise.