Brazil taxes for foreigners and expats: tax residency

Up to 27.5% on worldwide income, from day one or from day 184. When a foreigner becomes a Brazilian tax resident, what Law 15.270 changed in 2026, which returns to file and why a Paraguayan company does not help people who live in Brazil.

A foreigner who moves to Brazil and gets a residence permit pays tax on worldwide income, not just Brazilian income: from the day of arrival or from day 184, depending on the visa. A salary from a foreign employer is taxed monthly on a scale that tops out at 27.5%. And since 2024, Law 14.754/2023 takes another 15% a year on interest, dividends and gains in foreign brokerage accounts and on crypto exchanges. A remote professional earning $60,000 a year who does no planning hands Brazil about 24% of that income (worked example below).

In 2026, Law 15.270/2025 exempted income up to 5,000 reais a month (about $1,100), introduced a minimum tax on income above 600,000 reais a year (about $120,500) and a 10% levy on large dividends. The real is Brazil's currency; conversions here and below use roughly 5.2 reais to the dollar.

Meanwhile the popular advice to get a Paraguayan tax number and company usually does not lower the bill for someone who lives in Brazil, and sometimes raises it.

When does a foreigner become a Brazilian tax resident

The visa alone does not decide it. The rule comes from Receita Federal, Brazil's federal tax authority, in instruction IN SRF 208/2002 (Instrução Normativa, a normative ruling of the tax authority): what matters is the visa type and the number of days in the country within any 12-month window.

Source: IN SRF 208/2002, articles 2 and 3. If you do not reach 184 days within 12 months, a new period starts from your next entry.

Leaving tax residence is a formal step: you file a departure notice (Comunicação de Saída Definitiva do País) and a departure return (DSDP, Declaração de Saída Definitiva do País). You are then a non-resident from the day you leave.

Every dealing with the tax authority requires a CPF (Cadastro de Pessoas Físicas, the individual taxpayer number), which Receita issues free of charge, including through Brazilian consulates. How to count days and why being resident in two countries at once is risky is covered in our article on the 183-day rule, and the routes to moving, from a Brazil residence permit to a digital nomad visa, are listed at the end of this article.

What income is taxed and at what rates in 2026

A resident pays tax on every kind of income, but the rates differ enormously: from 0% on LCI bonds to 27.5% on a foreign salary. Some income goes into the progressive scale with monthly payments, some is taxed separately at 15% once a year, and some is exempt.

The IRPF (Imposto de Renda da Pessoa Física, personal income tax) scale for 2026: income up to 2,428.80 reais a month is untaxed, then rates of 7.5%, 15%, 22.5% and 27.5% on income above 4,664.68 reais (about $135). On top of the scale sits the Law 15.270/2025 reduction: tax falls to zero on income up to 5,000 reais, is reduced between 5,000.01 and 7,350 reais (about $1,500), and there is no reduction above 7,350.

Sources: Receita Federal, Law 14.754/2023, Law 15.270/2025. Sales also have exemptions: a sole property sold for no more than 440,000 reais (about $88,400) if you sold no other property in the previous 5 years, and small sales up to 35,000 reais a month (20,000 reais for shares).

For remote employees the first row is the one that matters. Brazil credits tax withheld in another country only if it has a double tax treaty with that country or reciprocity is established. According to Receita's list, treaties are in force with Russia (Decree 9.115/2017), Ukraine, Portugal, Spain, Argentina and Uruguay. There is no treaty with Paraguay.

More on crypto when relocating is in our article on crypto and taxes, and the basic rates for businesses and non-residents are on the Brazil taxes page.

What changed in Brazilian taxes in 2025-2026

The income tax reform took effect on 1 January 2026. For an expat earning more than 7,350 reais a month the scale barely moved, while people receiving more than 50,000 reais a month now carry a heavier load.

• Exemption up to 5,000 reais a month. Law 15.270/2025 was signed on 26 November 2025 without vetoes. The reduction brings tax to zero on income up to 5,000 reais and phases out by 7,350 reais.
• IRPFM minimum tax (Imposto de Renda da Pessoa Física Mínimo, a minimum tax on high incomes). If total annual income, including dividends and investment returns, exceeds 600,000 reais, the rate rises from 0 to 10% and reaches 10% at 1.2 million reais (about $241,000). Excluded from the base are, for example, LCI, LCA and the exempt part of capital gains. It will first be calculated in the 2027 return for 2026. If a Brazilian company has already paid corporate tax, the combined burden is capped at 34%.
• 10% on dividends. A Brazilian company withholds 10% of the whole payment when one person receives more than 50,000 reais a month from it. Non-residents pay 10% on any dividend. Profits whose distribution was approved by the end of 2025 can be paid without withholding under a transition rule.
• Tax haven lists. Instruction IN RFB 2.265/2025 of 9 May 2025 cut the tax haven threshold from a 20% to a 17% corporate tax rate, removed the UAE from the list and dropped Austria's holding company regime.
• Crypto reporting. Instruction IN RFB 2.291/2025 created the DeCripto report (Declaração de Criptoativos, crypto-asset declaration) in line with the OECD CARF (Crypto-Asset Reporting Framework, the standard for exchanging crypto data between countries). Monthly reports started on 1 July 2026: an individual using a foreign exchange, a decentralised platform or a self-custody wallet must report when monthly volume exceeds 35,000 reais.
• What did not pass. Provisional measure MP 1.303/2025 (medida provisória, a presidential decree with the force of law), with a flat 17.5% rate on crypto and a tax on LCI and LCA, lapsed after the Chamber of Deputies pulled it from the vote on 8 October 2025.

Sources: Law 15.270/2025, analysis by Trench Rossi Watanabe, Receita Federal.

Which tax returns a foreigner in Brazil must file and when

A missed annual return costs from $35 up to 20% of the tax due, and an unfiled report on foreign assets to the Central Bank up to $25,100, with false information in it up to $50,200.

Sources: Receita Federal, Central Bank of Brazil.

A resident lists foreign accounts, shares, company stakes and crypto in the assets section (Bens e Direitos) of the annual return, even if the country holding the money sends Brazil no data at all.

How much tax a new resident pays: worked examples

The same income can be taxed at 24% or at 10-15% in Brazil: the form in which you receive it decides.

Worked example 1: an individual. A developer earns $5,000 a month from a foreign company, about 26,000 reais. He is a Brazilian resident and pays carnê-leão himself: 27.5% × 26,000 - 908.73 = 6,241 reais a month. Over a year that is about 74,900 reais (about $15,100), or 24% of income. The calculation is simplified, without deductions or INSS contributions (Instituto Nacional do Seguro Social, the state social insurance system).

Worked example 2: your own company under Simples Nacional. The same income, 312,000 reais a year, runs through a company under the simplified Simples Nacional regime. For IT services to be taxed under Annex III rather than the more expensive Annex V, the owner pays himself a pro-labore (owner's remuneration) of at least 28% of revenue.

The saving against example 1 is about 29,000 reais a year (about $5,900). If the revenue qualifies as an export of services, the ISS (municipal services tax), PIS and COFINS (federal levies on revenue) shares come out of the DAS payment and the burden drops to roughly 10-11%. Export status depends on where the result of the service is delivered, and ISS disputes with municipalities do happen. Subtract the cost of bookkeeping support from the saving.

How to legally pay less tax in Brazil

The cheapest saving is getting the date right. Whatever you sell before your residence starts is outside Brazil's reach: foreign income of a non-resident is not part of its tax base.

1. Sell assets with large gains before residence. Shares, crypto and property abroad are better sold before arriving on a permanent visa or before day 184 on a temporary one, keeping the paperwork of each deal.
2. Work through your own company. Simples Nacional is open to companies with revenue up to 4.8 million reais a year (about $963,800); the Annex III rate starts at 6%. A foreigner with a Brazilian residence permit can open such a company, but Simples is closed if a partner lives abroad (article 17 of Complementary Law 123/2006 on small businesses).
3. MEI for small income. An MEI (Microempreendedor Individual, individual micro-entrepreneur) pays a flat 86.05 reais a month for services in 2026 (about $20). The revenue cap is 81,000 reais a year (about $16,300). The catch: regulated professions and many intellectual services are not allowed (Resolution 140/2018 of CGSN, the Simples Nacional management committee).
4. PGBL pension plan (Plano Gerador de Benefício Livre). Contributions of up to 12% of taxable income reduce the base in the full version of the annual return, provided you pay INSS. Tax is deferred until you draw from the plan.
5. Exempt instruments. LCI, LCA, CRI, CRA, poupança and infrastructure bonds (debêntures incentivadas) are tax-free for individuals. LCI and LCA are also outside the minimum tax base.

The result depends on the type of income, the amount, the visa and the date of the move, so the numbers are worth running before you arrive.

What is a RUC in Paraguay and who can get one

You cannot get a personal Paraguayan tax number without Paraguayan residence, and having one does not make you a non-resident of Brazil. Most of the popular schemes fall apart on these two facts.

The RUC (Registro Único de Contribuyentes, the single taxpayer register) is issued by DNIT (Dirección Nacional de Ingresos Tributarios, Paraguay's national tax authority). Registration is online and free, but an individual needs an identity document issued in Paraguay. For a foreigner that is the cédula de identidad, the identity card issued after residence is granted. Under General Resolution 133/2023 of the tax authority (then called SET), the RUC of a foreigner with temporary or permanent residence matches the cédula number. How to obtain residence itself is covered on the Paraguay residence permit page.

You become a Paraguayan tax resident if you spend more than 120 days a year in the country (Law 6380/2019). Brazilian residence does not end on its own at that point: only a departure notice or 12 months of absence ends it.

Sources: Law 6380/2019, DNIT. The guaraní is Paraguay's currency; conversions use about 5,900 guaraníes to the dollar. As a general rule IRP does not tax an individual's foreign income (DNIT has issued no direct ruling on interest at foreign banks).

The main trap for freelancers is IVA. In a binding ruling (consulta vinculante), the tax authority (then still SET) stated that a service a person performs in Paraguay for a client abroad is subject to IVA, because the work is done in the country. The ruling was issued under the previous Law 125/1991, but the territorial principle in Law 6380/2019 is the same. One view holds that such services are untaxed when the result is used abroad, but budget for 10%: Murblz specialists will settle the question before the first invoice.

A company in Paraguay: EAS or S.A., timing and cost

The simplest Paraguayan company can be opened online in 72 business hours with no state fee, but only a person holding a Paraguayan cédula can be its legal representative: either you once you have residence, or a representative under a power of attorney.

Sources: SUACE, MIC, DNIT. Both forms must record their ultimate owners in the beneficial ownership register under Law 6446/2019, need bookkeeping and must use electronic invoices: since 1 April 2025 new companies work only in SIFEN (DNIT's national e-invoicing system). Sectors, banks and the route to permanent residence are covered in our article on doing business in Paraguay in 2026.

Does a Paraguayan company work if you live in Brazil

For a Brazilian resident, a Paraguayan company usually does not lower the tax and does add risk. Law 14.754/2023 treats as controlled (entidade controlada) any foreign company in which you hold more than 50% of the capital or effectively decide who runs it. From there, its income and country of registration decide.

Source: Law 14.754/2023, articles 5, 6 and 8; instruction IN RFB 2.180/2024. Paraguay is not on the lists in instruction IN RFB 1.037/2010, either as a tax haven or as a privileged regime, even though its 10% rate is below the 17% threshold. The lists are revised (most recently in May 2025), so check the current version.

Worked example 3. A Paraguayan EAS earns $100,000 of profit and pays it all to its owner, who lives in Brazil. IRE at 10% is $10,000. On the $90,000 of dividends Paraguay withholds IDU at the non-resident rate of 15%: 13,500. Brazil takes 15% of the dividends received: another 13,500. The total is $37,000, or 37%. The Paraguayan dividend tax can be credited only under a treaty or established reciprocity, and there is no treaty with Paraguay. Even with a full credit the burden would be 23.5%, more than the Brazilian Simples Nacional company in example 2.

The main risk is not the rate but where the work is done. If you personally provide services while living in Brazil and a Paraguayan company with no office or staff invoices the clients, Receita may treat the company as a front and tax the income as your own on the scale up to 27.5%, with back taxes and penalties. Brazil's tax code CTN (Código Tributário Nacional, article 149) allows a reassessment when a transaction involves simulation.

Only real presence (substance) in Paraguay reduces this risk:

• an office and staff who do the work locally;
• decisions made in Paraguay, not from your laptop in São Paulo;
• company money that does not pay for your life in Brazil.

Everything has to be declared: the company stake and foreign accounts in the annual return, the profit under Law 14.754, and assets from $1 million to the Central Bank. Brazil has exchanged account data under the CRS (Common Reporting Standard, the OECD standard for automatic exchange of financial information) since 2018. According to the OECD list, Paraguay has committed to start automatic exchange by 2028. But a Brazilian resident must declare foreign accounts, companies and income whether or not any data arrives. How to prepare documents for banks is covered in our article on source of funds.

When a Paraguayan structure makes sense and when it does not

Paraguay beats Brazil on tax only if you actually move there to live. A company and a RUC without a move mean extra reporting in two countries at the same Brazilian rate.

It makes sense when:

• You move to Paraguay: residence, more than 120 days a year, your centre of life there, and a proper exit from Brazilian tax residence. Paraguay then generally does not tax foreign income, while services performed locally are taxed under IRP at 8-10%.
• The business has a real team in Paraguay and clients outside Brazil.
• You manufacture or provide services for the Brazilian market under the maquila regime (production to order for a foreign company for export, with a single 1% tax, Law 7547/2025).

It does not make sense when:

• You live in Brazil and invoice through a Paraguayan company: in example 3 the tax is higher than for an individual, plus the risk of recharacterisation.
• You are dual resident: more than 120 days in Paraguay while still resident in Brazil. There is no treaty between the countries, so there is no rule on which one prevails. Brazil taxes all worldwide income, including Paraguayan income.
• A nominee director is used to hide the owner. This breaches Law 6446/2019 on beneficial owners and Brazil's reporting rules.

Comparison: staying in Brazil, a Brazilian company or moving to Paraguay

On the same $60,000 a year from foreign clients, the burden ranges from 9% to 37% of income depending on the option. The figures are the worked examples from this article.

The Paraguay calculation: $60,000 is about 354 million guaraníes; IRP at 8% on the first 50 million, 9% on the next 100 million and 10% on the rest comes to about 33.4 million guaraníes (about $5,700), or 9.4%. The outcome depends on deductible expenses and the IVA question. To compare the countries as a whole, see should you move to Brazil and should you move to Paraguay.

Pitfalls and who this does not suit

• High income. The minimum tax of up to 10% now reaches dividends that used to be untaxed.
• Crypto on foreign exchanges. There is no 35,000-real exemption, and above the threshold a monthly DeCripto report is mandatory.
• Banks. Banks in both countries will ask where the money comes from; see our article on opening an account abroad.

The Paraguayan route does not suit people who are not ready to live in Paraguay more than 120 days a year, people whose clients are mainly in Brazil, or anyone hoping to hide income: that breaks the law in both countries, and Paraguay has committed to start automatic exchange of account data by 2028. Tax comparisons for other countries are in the taxes by country section.

How we can help

A tax set-up is cheaper to build before the move than to fix after the first return. Tax representation and calculations in Brazil are handled by Murblz specialists together with partners licensed by the CRC (Conselho Regional de Contabilidade, regional council of accountants) and the OAB (Ordem dos Advogados do Brasil, the Brazilian Bar Association); in Paraguay, together with local partners and escribanos.

If you are still choosing a country, start with the overviews Brazil: all programmes and Paraguay: all programmes.

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