27 de october de 2025

Is there a double taxation agreement between Brazil and the US?

Many Brazilians choose to live in the United States, study abroad, or even do research there.

But when the topic “leaves” tourism, many questions begin to arise, especially when it comes to double taxation, tax payments, and how Brazil relates to the United States in this regard.

With this in mind, I decided to clarify once and for all whether the two countries have any double taxation agreements, to help you.

Furthermore, as a lawyer specializing in Tax, International, and Social Security Law, I realize that people often, due to a lack of information, end up accumulating problems in these areas.

The relationship between two or more countries is complex and deserves careful analysis, especially when it involves taxes.

Stay tuned to learn more!

If you would like legal assistance from our team, send us a message on WhatsApp.

What is international double taxation?

International double taxation occurs when the same taxpayer is taxed by two or more countries on the same income, assets, or transactions.

This occurs because each country has its own tax laws and criteria for determining tax residency and source of income.

Imagine the following situation:

A person residing in Brazil works remotely for a company in the United States;
Brazil, based on the residency criterion, levies tax on this person’s global income, including the salary paid by the American company;
The United States, based on the source criterion (where the income was generated), also levies tax on the same salary.

In this case, the person pays taxes on the same amount in both countries, giving rise to double taxation.

International double taxation is a complex issue that affects both individuals and companies operating globally.

Ideally, seek guidance from a specialized attorney to understand the tax laws of each country involved and take advantage of available relief mechanisms.

Does Brazil have a tax treaty with the US?

No, Brazil does not have a tax treaty (also known as a “double taxation agreement”) in effect with the United States.

The absence of such an agreement is a significant issue for individuals and companies operating in both countries, as the same income may be taxed by both.

While there is no comprehensive treaty to avoid double taxation, Brazil and the US have an agreement to share tax information (FATCA — Foreign Account Tax Compliance Act).

This agreement aims to combat tax evasion by allowing the tax authorities of both countries to exchange data on the financial accounts of their respective residents.

Recently, the Brazilian Federal Revenue Service also signed a Mutual Recognition Agreement (MRA) with the US, but this one focuses on customs and security issues in foreign trade, not income taxation.

Do US residents pay income tax in Brazil?

For Brazilians living in the United States, the obligation to pay income tax in Brazil depends on one main factor: their tax resident status.

The Brazilian Federal Revenue Service considers an individual a tax resident in Brazil unless they formalize their permanent departure from the country.

In other words, if you have not filed the Final Departure Notice and Declaration, the Federal Revenue Service considers you to remain a tax resident in Brazil.

Therefore, you are required to declare and pay taxes on all your worldwide income, including wages, investments, and other income earned in the US.

In this case, you may have to pay taxes in both countries, but Brazil allows you to offset taxes already paid in the US to avoid double taxation.

Now, if you have filed the Final Departure Notice and Declaration, you are already considered a non-resident for tax purposes in Brazil.

Your tax liability in Brazil is limited to income from Brazilian sources. For example, a property you rent in Brazil.

How does tax residency affect Brazilians’ taxes in the US?

Your tax residency in the US determines how your income is taxed by the US government.

Contrary to popular belief, tax residency in the US is not the same as immigration status.

The Internal Revenue Service (IRS) uses two main criteria to determine whether a foreign national is a tax resident or a non-tax resident:

Green Card Test: If you have a Green Card, you are considered a tax resident for tax purposes from the moment you obtain it, regardless of where you live;
Substantial Presence Test: If you do not have a Green Card, this test determines your tax residency based on the time you physically spend in the US.

Therefore, you are considered a tax resident if you have been present in the US for at least 31 days in the current year.

And the total number of days in the last three years (including the current year) is 183 or more, using a specific formula:

Days present in the current year (100%);
Plus 1/3 of the days present in the previous year;
Plus 1/6 of the days present in the second previous year.

If you are a tax resident, taxation applies to your worldwide income, just like a US citizen.

This includes income from wages, investments, and any other source, regardless of where it was generated (in Brazil or elsewhere).

However, if you are not a tax resident, taxation applies only to US-source income.

This includes wage income from a US job or capital gains from US investments.

What are the tax rules for students and temporary residents in the US?

The tax rules for students and temporary residents in the US are different from those for citizens and permanent residents (green card holders).

The main distinction is based on the concept of tax resident alien and non-resident alien.

Most students (with F-1 visas) and exchange program participants (with J-1 visas) are considered tax non-residents for tax purposes during their first years in the US. This is due to a special exemption from the “Substantial Presence Test”:

Normally, students (F-1 visas) are considered tax non-residents during the first five calendar years of their presence in the US.

Professors, researchers, and interns (J-1 visas), in general, are considered tax non-residents during the first two calendar years of their presence in the US.

As a tax nonresident, you are only required to pay income tax on U.S.-source income, such as:

Wages from a U.S. job (such as an internship or on-campus work);
Scholarships or grants that exceed tuition and book costs;
Other income from activities carried out in the U.S.

Income from a foreign source (such as rent from a property in Brazil or investments abroad) is not taxed in the U.S. as long as you maintain your tax nonresident status.

What are the tax rules for entrepreneurs and businesses in the US?

The tax rules for entrepreneurs and businesses in the US fundamentally depend on the legal structure chosen for the business.

The US tax system is complex, with federal, state, and, in some cases, even local rules.

1. Sole Proprietorship:

The simplest type of business, where the company does not have a separate legal identity from the owner.

There is no corporate income tax. The profits of the business are considered personal income of the owner and are reported directly on the individual income tax form (Form 1040).

In addition to income tax, the owner must pay Self-Employment Tax, which covers Social Security and Medicare (approximately 15.3% of net income).

2. Limited Liability Company (LLC):

The LLC is the most popular structure for small and medium-sized businesses in the US because it offers limited liability protection, separating personal and business finances.

By default, an LLC is a “pass-through entity.” This means that the company’s profits or losses pass directly to the owners, who pay the tax on their individual income tax returns, similar to a sole proprietorship. The LLC itself does not pay federal income tax.

The great advantage of the LLC is its flexibility. An LLC can choose to be taxed as a corporation (C Corp or S Corp), depending on what is most tax-advantaged for the business.

3. Corporations (C Corporation and S Corporation):

C Corporation (C Corp):

A legal entity completely separate from its owners (shareholders).

This structure is subject to double taxation. First, the corporation itself pays tax on its profits (Corporate Income Tax).

Second, when profits are distributed to shareholders as dividends, they are also taxed as personal income.

A C Corp pays federal corporate income tax (currently at a flat rate of 21%).

S Corporation (S Corp):

A corporation that elects special tax treatment to avoid double taxation.

Like an LLC, an S Corp is a pass-through business. The profits pass directly to the shareholders, who report the income on their individual tax returns. The S Corp itself does not pay federal corporate income tax.

Shareholders who also work for the company can pay themselves a “reasonable salary” (subject to payroll tax) and the remaining profit as a “distribution” (not subject to self-employment tax), which can generate tax savings.

And there are other taxes, such as:

Payroll Tax: If your company has employees, you will be responsible for withholding and paying federal and state payroll taxes, including Social Security and Medicare;
State Taxes: Many US states levy a state income tax and, in some cases, a sales tax. Rates and rules vary widely from state to state, making the location of your business an important tax decision;
Taxes for Foreign Entrepreneurs: If you are not a US resident, the rules become more complex, especially for companies that do not have a physical presence in the country but generate revenue there. The lack of a tax treaty between Brazil and the US means that mechanisms to avoid double taxation are more limited.

Given this complexity, choosing the legal structure and tax strategy for your business should be done with the help of a specialized accountant or tax attorney.

What is retirement income taxation like for Brazilians in the US?

Retirement income taxation for Brazilians living in the US is a complex issue and depends on two main factors: your tax residency status in the US and the source of your retirement income.

For the US Internal Revenue Service (IRS), if you are a tax resident (either by holding a Green Card or meeting the Substantial Presence Test), you are taxed on your worldwide income.

This means that your Brazilian retirement income, whether from the INSS (National Social Security Institute), a private pension plan, or any other source, must be declared and may be taxed in the US.

Brazil, in turn, also has rules for taxing the retirement income of Brazilians living abroad. The Brazilian government can tax this income at source.

Since there is no tax treaty between Brazil and the US, the main mechanism for avoiding paying taxes in both countries is the Foreign Tax Credit.

This credit allows you to deduct from your US tax liability the amount of tax already paid in Brazil on the same retirement income. The credit amount is limited to the tax due in the US on that specific income.

Furthermore, developing retirement planning with a specialized attorney can help you identify possibilities and ways to avoid major problems.

If you are a non-US tax resident (for example, you are in the country on a tourist visa and do not meet the Substantial Presence Test), your situation is simpler.

Your retirement income from Brazilian sources, such as INSS (National Institute of Social Security) or a private pension plan in Brazil, is not taxed in the US.

The taxation of this income, in this case, is governed by Brazilian tax laws.

If a Brazilian has lived and worked in the US and is entitled to a US government pension (Social Security) or a private pension plan (such as a 401k), this income is taxed according to US rules and may also be taxed in Brazil, depending on your tax residency status with the Brazilian Federal Revenue Service.

In short, the taxation of your Brazilian retirement pension in the US depends on whether the IRS considers you a tax resident.

If so, you will need to declare this income and use the foreign tax credit to avoid double taxation.

Which countries have a double taxation agreement with Brazil?

Currently, Brazil has double taxation agreements with several countries, both in Latin America and Europe.

In Latin America, these are:

Argentina:

The agreement prevents double taxation on income taxes, being an important instrument for bilateral economic relations.

Venezuela:

The convention aims to avoid double taxation on income and prevent tax evasion, promoting economic exchange.

Uruguay:

The agreement eliminates double taxation on income, which is essential for companies and investors operating in both countries.

Chile:

The agreement updates the rules to prevent double taxation and tax evasion, favoring reciprocal investment and tax cooperation.

Mexico:

The agreement prevents companies and individuals from being taxed twice on the same income, which is essential for trade relations between the two countries.

Peru:

The agreement prevents double taxation on income taxes, being a relevant instrument for bilateral trade and investment relations.

Ecuador:

The agreement, although under discussion, aims to cooperate to prevent double taxation and tax evasion, similar to other treaties already in force.

In Europe, some of the countries that have agreements with Brazil are:

Italy:

The convention establishes that taxes paid in one country can be offset in the other, which benefits investors and reduces the tax burden.

Germany:

It defines rules to avoid double taxation and prevent tax evasion, being crucial for trade and investment between the two countries.

Switzerland:

The agreement seeks to eliminate double taxation on income taxes, being essential for the flow of investment between Brazil and Switzerland.

Russia:

The agreement aims to avoid double taxation on income taxes and prevent tax evasion.

Sweden:

The agreement is one of Brazil’s oldest and aims to avoid double taxation on profits, wages, and other income.

Luxembourg:

The agreement seeks to avoid double taxation on income and capital, providing a safer environment for the flow of investments.

Netherlands:

The agreement is essential to avoid double taxation on corporate profits and wages, simplifying transactions for investors and expatriates.

France:

The agreement provides for tax offsetting between the countries, which benefits multinational companies, investors, and expatriates, ensuring legal certainty.

Portugal:

The agreement is important to avoid double taxation on income, which benefits the large flow of people and investments between the two countries.

Belgium:

The agreement establishes rules for the taxation of wages, profits, and other income, being essential for those with economic ties in both countries.

Spain:

The treaty prevents double taxation on capital gains, dividends, interest, and wages, being essential for companies and workers.

Finland:

The agreement, currently in the approval phase, aims to regulate air services and other types of income, ensuring a more favorable environment for companies in both countries.

Slovakia:

The agreement seeks to eliminate double taxation and prevent tax evasion, promoting a more favorable environment for bilateral trade.

Czech Republic:

The treaty aims to eliminate double taxation, boosting investment and economic cooperation between the two countries.

Austria:

It allows companies and individuals to avoid paying taxes twice on the same income, encouraging business between Brazil and Austria.

There are also agreements with other countries, such as China, Singapore, Turkey, the United Kingdom, Colombia, South Korea, and Japan.

It’s worth noting that the agreement with Colombia is not yet finalized; it is still in process. Some European countries, such as Norway, Hungary, and Denmark, are also involved.

Conclusion

Well, in this text, you’ve gained a better understanding of how the relationship between Brazil and the United States works when it comes to double taxation.

Although the countries don’t yet have an agreement in this regard, there are still ways to avoid harm and understand exactly where your money is going.

As a specialist lawyer with over 10 years of experience, I advise you to seek a trusted legal professional if you still have questions.

Only a qualified professional can understand your situation with the seriousness it deserves, analyzing the main points and finding solutions.