Telecommuting - US company but living in Brazil - possible? help!

As long as you are working in the US with a contract in the US, receiving money in the US, Brazilian law does not enter the equation, except Brazilian tax law which requires you to declare foreign income.

The fact that you work physically from Brazil is irrelevant.

They seem to say that they need to pay me partially in reais. Do you think that is so that they can try and help take care of my Brazilian tax liability? Or maybe they're reading the law such that they're required (similar to what is stated here: http://riodejaneiro.angloinfo.com/infor … ncome-tax/)?

Is my assumption correct that I'll be taxed in the US and then will need to pay taxes in Brazil as well?

Hello jota23,

I read the article you linked to in Angloinfo. If you notice they mention "if you work in Brazil". As I told you the Receita Federal really only comes into the picture if you have Brazilian source income sufficient to require you to pay taxes (and thus require you to file a return). If so, you will also be required to report your "world income". That won't be taxed per se, but it could have the effect of bumping you up to a higher tax bracket.

From what I can see Brazil operates on the same system as Canada does, so don't be fooled by the terms "RESIDENT" and "NON-RESIDENT" these refer to 'for tax purposes ONLY' and have nothing whatsoever to do with your immigration status. For example, for many years when I first came to Brazil in 2002 I was cosidered a "RESIDENT" of Canada for tax purposes, despite the fact that I no longer resided there. Then I requested a change of status to "Deemed Non-Resident" however I still pay my income taxes ONLY in Canada since I have not got sufficient Brazilian sourced income to require me to file a Brazilian income tax return. I do however report that Brazilian sourced income on my Canadian T1-General.

Cheers,
William James Woodward - Brazil & Canada Expert, Expat-blog Team

I see. It seems that the tax regime is different than what we have in the US and I'm wondering if that is where they are missing this. Do you happen to have some reference text that I could pass on to them that might help them reach the same conclusion?

For instance, a US resident would always file for taxes but they'd only qualify for the foreign earned income tax credit if they have a home in the other country or have been outside of the US for 330+ days out of a calendar year. If I'm reading this correctly, you're stating that there is some qualification for where you get paid or work that dictates whether you even file a return to receita federal (this doesn't matter to the IRS ).

Thanks again! I really appreciate the help!

Never mind. They're not even willing to talk about it. Sad, but oh well...

Thanks again for your help. I really appreciate the guidance and assistance. This forum is great. I hope to be able to contribute to it as you do!

James, you do know that you are by law required, as a resident of Brazil, to declare foreign earned income, right....

If any foreign income when combined with your Brazil sourced income is above the exempt amount yes, that's correct. If you have been filing a "Declaração de Isento" which is no longer required because you don't have income sufficient to require filing how in the world would you declare foreign income?

My combined income, both Canada source and Brazil source is so low that I don't pay taxes on any of it in Canada, it is deducted from my pension, but all of it gets refunded at the end of the year since it does not exceed the Basic Personal Exemption. I am required to file a Canadian tax return every year because of the pension.

I am not required to file a Brazilian DIRPF since I do not earn above the exempt amount even if my pension (when converted to reais) were to be counted.

Cheers,
James

Hi y'all... Greetings from the USA...

I was told by my tax attorney in Manaus, until I am a permanent resident (with an RNE) I do not have to declare anything to Brazil. And even after I get residency when I am supposed to declare it, little will be done to collect anything. That said, I am constantly pumping R$$$$$$ into the bureaucracy and economy of Brazil. And, at the same time watching the USD increase in value.

Sven,

The following is an excerpt from the Canada-Brazil Tax Treaty:

Article XVIII

Pensions and Annuities

1. Pensions, annuities and alimony arising in a Contracting State and paid to a resident of the other Contracting State shall be taxable only in that other State.

2. Notwithstanding the provisions of paragraph 1, the amount of a pension, annuity or alimony which exceeds four thousand Canadian dollars ($4,000) in a calendar year may also be taxed in the Contracting State in which the pension, annuity or alimony arises. The competent authorities of the Contracting States may, if necessary, agree to modify the above-mentioned amount as a result of monetary or economic developments.

3. As used in this Article:
a. the term “pension” means payments made after retirement in consideration of past employment or by way of compensation for injuries received, in connection with past employment;
b. the term “annuity” means a stated sum payable periodically at stated times during life, or during a specified or ascertainable period of time, under an obligation to make the payments in return for adequate and full consideration in money or money's worth (other than services rendered).

4. Notwithstanding the provisions of paragraphs 1 and 2:
a. social security pensions arising in a Contracting State and paid to a resident of the other Contracting State shall be taxable only in the first-mentioned State. However, such pensions shall be taxable only in the other Contracting State if the recipient is a national of and a resident of that other State;
b. war veterans pensions arising in Canada and paid to a resident of Brazil shall be exempt from Brazilian tax.


According to my understanding of the Treaty, especially the underlined part in Paragraph 4. a. My pension income from Canada would only be taxable here in Brazil if I were BOTH naturalized as a citizen AND resident here in Brazil. Correct me if I'm wrong.

I rarely work and when I do it is self-employment, my Brazilian sourced income is so far below the amount where one is obliged to file an annual DIRPF that it hurts!

Cheers

You're absolutely right Matt. All of us 'gringos' pay loads of Brazilian taxes whether we like it or not. Brazilian income taxes, if we're REQUIRED to pay them is a drop of water in the ocean in the overall scheme of things.

The more we spend, the more we pay taxes. What we pay out every month right now in "hidden" taxes without even considering income tax would support a couple of Brazilian families.

The fact that they are exempt from tax does not mean you should not declare. It just income exempt from tax.

So "technically" you should file a full declaration and not the simplified one.

On the other hand, there is no way they are going to check...

I fail to understand how I would be required to even file a Declaration if I do not have sufficient income that requires a declaration, regardless of WHERE that income is generated..... As I understand it NOBODY is required to file a DIRPF unless they earn over R$17.708; or have exempt income (taxable or non-taxable) in excess of R$40.000, or assets (including unused land)in excess of R$300.000. In any case my total combined annual income doesn't surpass R$12.000 from ALL sources and I have no assets or bank accounts. I have absolutely no intention whatsoever to go through the futile and useless process of reporting any of that to the Brazilian government since they technically don't even consider me a permanent resident yet and reporting that income would clearly violate the Canada - Brazil Tax Treaty anyway.

I just won't do it, not now, not ever and if they want to try and send me back home for that, then more power to them. I'll fight them until my dying breath. I'm so sick and tired of this screwed up government that wants nothing more than to bleed every last man, woman and child dry that it makes me want to vomit.

It's bad enough that every last cent that I receive from Canada is subjected to a financial transaction tax, plus exchange rate and every purchase I make in this country, every service I contract, every mouthful of food is taxed; especially when I've never received one single centavo of that in return in the way of government services.

It's somewhere in the help file for the tax app.

I wouldn't bother either.

I am definitely not exempt from filing if anything over R$100.000,00 is required to be declared.

I better go out and buy RapidoCartorioTurboTax by Intuit.

But like James, I am truly exhausted from this countries ever attempt to rob me and break my sanity. Good luck!

Thanks all... It's looking like I may just end up testing the waters with a local job. Lower pay, but still decent pay nonetheless. Then I just have to keep Uncle Sam's grubby hands off of it. From what I understand that doesn't seem too difficult.

jota23,

If you are working in Brazil as an "employee" then income taxes will be deducted at the source. You will need to file a Brazilian income tax return regardless of the amount you earn, just in order to receive any potential income tax refund. Anyone earning less than R$17.708 is exempt from income tax provided they have not got other assets that would require them to file.

As a US citizen you must still file annual income tax returns with the IRS and you must declare your Brazilian sourced income as "world income" which may or may not be taxed in the USA.

jota23,

Please refer to this site for more information. I wouldn't blow off your US tax obligations. I have every intention of blowing off my Brazilian tax obligation here in Brazil as I pump enough money into the economy and still get screwed from the other end.

Not paying US income tax can have civil and criminal consequences. Now, that said I realize our previous Treasury Secretary failed to pay his own income taxes.

A few years ago I did not file income tax because I forgot. (Actually I did not file becauseI owed a lot.) I called the IRS on something and the first question she asked me after to identifying me was - "Why did you not file last year?" She wanted documented evidence, etc. It was something that caused and cost me hours of agony later. So if you have filed every year and all of a sudden stop the red flags go up, especially if you return to the USA and start working again.

http://americansabroad.org/issues/taxat … broad-faq/

Matt-

Thanks all! Don't get me wrong, I definitely intend to file every year. I'll just need to also file for the foreign earned income exclusion up to the amount I'm allowed and it sounds like that isn't too bad so long as I'm within the limits of the exclusion. As part of this, I may also look to see how much it'd cost to hire an accountant for all of this "fun."

08/20/22 @James what about those that still have homes in the US and ONLY get paid by the US employer (source of income from Brazil = ZERO)?

Would one get in trouble with the IRS or with their home company if they lived on Brazil for a year or 2 while working for a US company and only paid US income taxes?

Thanks.

- @OzneSil