It is not intended to provide in depth answers to specific questions and it should be treated as a general outline only.

Due to the complexity of, and frequent changes to, Brazilian and international tax law, specific advice should be sought regarding your own personal circumstances.

Country background

With the Atlantic Ocean to the east, Brazil has a 7,491 kilometer coastline. The country borders all the South American countries except for Ecuador and Chile.

The Federal Republic of Brazil is currently divided politically and administratively into 27 federative units, with 26 independent states and one federal district. The federative units are autonomous entities having their own constitutions, government (and legislature) as well as powers to tax. In each state the executive power is exercised by a governor who is elected every four years. The judiciary power is exercised by trial and appellate courts that deal with general legal matters.

The municipalities are territorial units with legal personality and with a certain administrative autonomy. They are the smallest autonomous units in the federation. Each municipality has its own fundamental law that defines its political organization, but is limited by the Federal Constitution. There are 5,570 municipalities throughout the national territory. Some have populations larger than those of several countries in the world (the city of São Paulo has close to 12 million inhabitants). Others have less than 1,000 inhabitants.

The Federal District has characteristics common to the states and municipalities. Unlike the states, it cannot be divided into municipalities. However, it can collect taxes as if it were a state as well as a municipality.

Demographics

• The population of Brazil is currently 206,081,432¹ inhabitants
• The population is 51% female and 49% male²

¹IBGE – Estimates Of Resident Population In Brazil And Federal States With Reference Date Of July 1St, 2016
²IBGE – 2010 Demographics.
³IBGE – 2016 data.

The Tax System/Environment

The current Brazilian taxation is governed by the Federal Constitution, which granted power to Federal, State and Municipal Governments to collect taxes. Due to the several regulations enacted by each of these governmental instances, Brazilian taxation system is very complex, leading to an environment in which taxpayers are requested to comply with many obligations, both comprising tax collection and reporting.

Individuals living and working in Brazil face a number of taxes. The principle ones being taxes on earnings, consumption and certain financial transactions. The intent of this guide is to explain in some detail how an employee´s compensation and personal income are subject to income and capital gains taxation as well as social charges, as applicable.   In addition to direct taxes, Brazil has a complex indirect taxation system.  Taxes on consumption (both goods and services) account for approximately 44% of Brazil´s total tax revenue. This compares with direct income taxes (on individuals and companies) resulting in 21% of total tax revenue.  (The remaining components of tax revenue are employer social charges, payroll and property taxes).  In contrast the OECD average percentage of tax revenue for consumption and tax on income/profits is 33% and 33% respectively.

Economy

Brazil is the fifth largest country in the world geographically. It is the only Portuguese speaking country in the Americas and the largest Portuguese-speaking country in the world, in addition to being one of the most multicultural and ethnically diverse nations on the planet.

Furthermore, it is the seventh largest country in the world in terms of nominal GDP (Central Bank – BC, IMF and Economist Intelligence Unit 2013 Forecast. EIU.) and America´s second largest economy.  Even with the current political or economic situation, the IMF holds the prospects that Brazil could become the 5^th largest economy by 2050. Brazil also has a diversity of wildlife and natural environments and vast natural resources in a large variety of protected habitats. The country is a member of international organizations, such as the UN (WTO), MERCOSUR, OAS, CPLP, LAIA, ACTO, UNASUR, CI-A, UL and OIE.

As well as being the fifth most populous country Brazil is a country of resources.    In natural resources it is ranked first in renewable water resources, and for commodities Brazil is ranked first in for coffee, sugar cane and soy, third in both iron ore and meat production, and fourth in terms of cereal production. Brazil´s oil reserves stood at 12^th place in 2014 whereas its reserves of shale-gas stood at tenth (IMF, CIA World Factbook, US Geological Survey, ONU, FAO, IBG, Bacen and EIU. Last available data as at June 2015).

Entry requirements

All foreign nationals wishing to come to Brazil for the purpose of employment must have a valid passport and an appropriate visa type based on the facts of each case. The final visa would generally be issued by the Brazilian Embassy or Consulate in their location.

Work Permit

The Brazilian immigration authorities allow non‑Brazilian nationals to work on a regular basis only if they hold one of the following principle types of visas:

• Temporary visa (2-year visa) type V with an employment contract with a local company;
• Temporary visa (1-year visa) type V without an employment contract with a local company, under the “umbrella” of a Technical Assistance Agreement existing between a Brazilian and a foreign company; or a,
• Permanent visa.

It should be noted that holders of a business visa are not able to undertake any remunerated activities in Brazil.  Business visa holders are only permitted to attend meetings, participate in seminars, meet customers and suppliers and identify local market prospects and opportunities.

Visas are requested by a local Brazilian company and the foreign national will only receive authorization to work for the applying company responsible for sponsoring the visa.  A change in employment would require a new visa authorization.

After a period of five years a temporary (non-permanent) visa loses its link to the Brazilian company and the foreign national may apply (after the end of the fourth year of temporary visa) for a permanent visa that generally brings with it no immigration restrictions.

However, holders of permanent visas may only work for a different local company if this company is part of the same economic group (e.g., joint ventures).

Dependents

The visa status of accompanying dependents is linked to that of the visa holder, this includes legally recognized same sex partners. If a foreign national permanently leaves Brazil his/her family must also. Dependents who wish to remain in Brazil would be required to obtain a new visa for them from the immigration authorities.

The visa status of a non-working spouses does not give him/her the right to work.  Non-working spouses who gain employment in Brazil are required to obtain a valid visa.  As with all non-Brazilian nationals the local company must request the relevant visa and work approval.

Education

There are a number of private and international schools in Brazil, largely concentrated in the main cities of Brasilia, Sao Paulo and Rio de Janeiro.

Most international schools follow the British or American curricula, while some cater to other nationalities, including French, German, Italian, Spanish and Portuguese. International schools may also offer the International Baccalaureate or IB. Many Brazilians educated their children at these schools owing to their higher standard of education as well as an international cultural/ mix.

Brazilian private schools generally follow the Brazilian local curriculum; some have a religious foundation, while others offer bilingual instruction.

Office and Retail Hours

The regular working week in Brazil has 44 hours over a six-day period (8 hours per day – 5 days, and 4 hours per day – 1 day). It represents a system of 220 working hours a month.

When it comes to shopping, it is possible to divide stores into two types, those located in streets and those inside malls:

• Stores placed inside malls (shopping centres) mirror the opening hours of the building.  These are generally from 10:00 AM to 10:00 PM, except for Sundays, when stores open around 2:00 PM and close 8:00 PM.
• Stores in the streets are accustomed to the standard business hours, opening from 8:00 AM to 6:00 PM. However, some will them stay open until 8:00 PM or even later.