Stuck in Brazil and Stuck Paying Taxes

It’s not the first time we’ve written about foreigners unexpectedly having to pay taxes in Brazil. In fact, in this article, we raised the issue for anyone staying in Brazil for 184 days or more during a 12-month period. It doesn’t matter what kind of visa you have. You can be considered a resident for tax purposes even as a tourist. It all depends on how much time you spend in-country.

The problem now, however, is Coronavirus. More and more visitors are stuck in Brazil because of restrictions on traveling to other countries. This has led to the Brazilian government issuing an immigration directive automatically extending visas for foreigners already in the country. But the issue remains - what about the tax implications?

To start, let’s make one thing clear. If you’re a US citizen or legal permanent resident, you can return to the United States if you’d like. You’re not “stuck” in Brazil. But if you stay, no matter the reason, and you hit the 184-day mark, you might just end up having to pay taxes.

And remember - Brazil taxes on worldwide income. Yes, that’s right. Any income you earn back in the US would also be taxed in Brazil.

Although it’s been discussed, Brazil’s federal tax authority (Receita Federal) has yet to issue any guidance or an exception to the tax residency rule because of the pandemic. So for the time being, you’re best to play it safe. Keep track of the time you spend there so you can avoid inadvertently subjecting yourself to unnecessary tax burdens.