In Brazil, the taxes are imposed at the Union, Federal District, state and municipal levels.
The Cadastro de Pessoa Física, or CPF, is an Individual Taxpayer Number and is required for many everyday transactions in Brazil. Everyone resident in Brazil, whether they are a Brazilian or a foreign national, must pay personal income tax or “imposto de renda das pessoas físicas”. The Federal Government taxes individuals at the source.
When the financial year comes to an end in April taxpayers must also declare their annual income. Personal income tax declarations can be made online via the website of the Ministry of Finance, or using a diskette with the downloaded and completed declaration form that you then submit to an agency of the Banco do Brasil S.A or the Caixa Econômica Federal. You may also fill out the form at the post office but a small fee is imposed in this case. Declarations and payment made online must be submitted before 8pm on 30th April.
You are considered a resident of Brazil for tax purposes if you come to Brazil on a permanent visa or if you are employed under temporary contract to a Brazilian company. You are liable to pay tax if your annual income – from any source - exceeds R$15,764.28.
Certain expenses are deductible from income tax, including social security contributions, maintenance payments to a spouse, education expenses of both the tax filer and their dependents to a limit of ed to R$1,700 per year, severance pay and some medical expenses such as doctor, dentist and laboratory fees, psychologists, hospitals and x-rays.
You may use the Ministry of Finance’s tax calculator to work out the amount of your income tax:
But non-residents of Brazil are taxed at the source to the extent of 15 percent. Brazil has fiscal conventions with many countries to avoid people being taxed twice. Consult the Ministry of Finance for more information.
A tax on services (imposto sobre serviço) must be paid by the self-employed. This tax is normally paid to the local authority (Prefeitura). ISS is between two percent and five percent of the quoted and agreed price of a provided service. Some liberal professionals, such as psychologists, lawyers, doctors and dentists have an annual fixed ISS payment.
The inheritance tax (ITCMD) is a state tax on the transfer of goods, property and money when a death occurs. The Federal State of Brazil has fixed the amount of ITCMD at eight percent. However, each state may set a different rate - for example in the State of São Paulo the inheritance tax rate is only four percent.
A mandatory motor-vehicle ownership tax (imposto sobre propriedade de veiculos automotores - IPVA) is payable annually for all motor vehicles in Brazil. This tax is calculated according to the vehicle's value. In some states in Brazil it is possible to pay this in monthly instalments.
The Brazilian road tax system includes an automatic minimum third-party insurance system known as DPVAT (personal injury caused by road vehicles/danos pessoais causados por veîculos automotores de vias terrestres). This is sometimes referred to as Seguro Obrigatrio or compulsory insurance. This ensures all vehicles have minimum third-party cover and victims of road accidents will receive damages or compensation for injuries.
The urban building and land tax (Imposto sobre Propriedade Predial e Territorial Urbana) is a property tax payable every month to the local authorities where the property is located. The IPTU of a property is determined by its market value, location and the type of property (building, house, apartment or land). IPTU is an annual tax and can be paid all at once or in 10 monthly payments without interest. Most Brazilians and foreigners choose to pay IPTU through direct debit from their bank accounts but IPTU can also be paid by telephone, at any ATM bank machine or in person at many banks.
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