Paying Taxes as an American Contractor in Brazilian

Hi everyone,


Recently moved to Porto Seguro, Bahia. Is there any legal way to receive my income into a foreign bank account without it being taxed at end of year?


I work for an online company as a Sole Proprietor. Basically, a 1099 contractor. They send me a 1099-NEC at tax season.


Just curious! Thanks, Andrew


03/23/24    Hi everyone,
Recently moved to Porto Seguro, Bahia. Is there any legal way to receive my income into a foreign bank account without it being taxed at end of year?
I work for an online company as a Sole Proprietor. Basically, a 1099 contractor. They send me a 1099-NEC at tax season.
Just curious! Thanks, Andrew
   
    -@Andrewsoluna


Hi, Andrew.   Welcome to Brazil. Not if you're a legal resident of Brazil -- i.e., have a CRNM, or if you spend 183 days a year in Brazil even as a visitor. 


Brazil has a pretty consistent policy against double taxation, though, so if you work with a Brazilian accountant (which isn't usually very expensive), s/he should be able to help keep your Brazilian taxes reasonable.  The IRS will not give you any allowance for Brazilian taxes paid on non-Brazilian income, so it's good practice to do your US taxes first, so that your Brazilian accountant knows how much you're already paying in taxes and can take it into consideration.


Since you recently moved here, you have some time to set up an accounting relationship.  Taking care of it in the next two to three months should be good enough, although I probably wouldn't let it go much beyond that.

@abthree, is there a simplified "how to file taxes in Brazil" guide? 


Since Brazil and USA have double taxation provisions, it is best "to divide and conquer"...  The IRS deadline is typically April 15 of every year.  What is the filing deadline for the Brazil RF?  Is there a link to the RF publications for how to disclose IRS payments on income received in Brazil that can be used as credit for Brazil RF?


If this is kinda complicated, then yes, when should someone start getting the accountants involved both in the US and in Brazil?


Sorry for asking for information like a project manager would be - but this is totally new to me and the only thing that I can do is book calendar appointments with the right peoples....


03/24/24    @abthree, is there a simplified "how to file taxes in Brazil" guide?  Since Brazil and USA have double taxation provisions, it is best "to divide and conquer"...  The IRS deadline is typically April 15 of every year.  What is the filing deadline for the Brazil RF?  Is there a link to the RF publications for how to disclose IRS payments on income received in Brazil that can be used as credit for Brazil RF?If this is kinda complicated, then yes, when should someone start getting the accountants involved both in the US and in Brazil?Sorry for asking for information like a project manager would be - but this is totally new to me and the only thing that I can do is book calendar appointments with the right peoples....        -@Pablo888


Not a problem:  I'm an ex-Consultant, and I love good project managers.  Intelligent questions and a desire to know are always better than general cluelessness, given the option.


It IS complicated, and the RF rules, while not unreasonable, change every year.  There is a simplified return, which so far I've been able to use every year but I'm not aware of a simple DIY guide.  If there is one, it would change every year, too.  Even though my Portuguese is good enough  - and I'm married to a university educated  native speaker- it's not an area of knowledge where either of us wants to dedicate the time to become experts.  And given my native risk aversion, I'd be in constant danger of overpaying left to my own devices.  Much better to pay a pro.


Historically, returns were due by April 30, so a timely US filer would have no trouble hitting both dates.  With the pandemic the date began moving out:  the RF began accepting returns a couple of weeks ago, and this year's deadline is May 31.  As in the US, extensions are readily available.   If a taxpayer delays TOO long, though, your bank may start getting nervous and throttle your account.   This is one reason that I always recommend developing a good relationship with your bank manager in this high-touch culture.

@Andrewsoluna

I am in the process of dealing with my USA and Brazilian taxes right now. I have dual citizenship and moved back to Brazil after 32 years in the USA.  Brazil's president passed a new tax law that foreign investments will have to be declared and taxed at 15%.

I spent more than 183 days in the country last year therefore I will have to file Brazilian income tax. Brazil and USA do not have a tax treaty. The only treaty they have is for payment of social security.


Your employer might know if there is a way for what you want to do. After a long time searching the internet, I found an accounting company in Teresopolis, Rio that does Brazilian taxes for people who have foreign investments. They might know the answer to your question. If you want a video call with them, their fee is RZ 550.00 real. 

I am waiting for my USA taxes to be ready to talk to them.

Here is their contact *** They also have short videos on YouTube -***The fastest way to contact them is through WhatsApp ***

Hope this helps

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Hi Andrew, your situation is pretty similar to mine. Me and my wife are moving to Espirito Santo this middle of June to live closer to family. We already have a home there. What I'm still figuring out is the tax situation. 15% on the interest earned seems pretty steep. Any side agreement to ease that?