Tax Issues

ukboy wrote:

Hi - I am looking at a consulting position in Brazil where I will work on a 4 week rotation in country with 2 weeks off back in the UK.  I intend to invoice for my services from my UK company to the company in brazil or there corporate headquarters in USA.  I envisage paying income taxes in the UK as thats my residence however given i will be providing a service in brazil would i have to pay brazilian income taxes?  also any ideas how to minimize my tax exposure greatly appreciated

Can someone advise pls - thanks in advance for your help.

You are required to pay income tax on any Brazilian sourced income, regardless of where you receive the payment. The company you are billing will most certainly report the expense on their business taxes and you will need to issue them a receipt or invoice with your CPF or (CNPJ if you actually register as a business here) number, so there will need to be a corresponding income tax return filed for that CPF (or CNPJ).

You will pay taxes on that Brazilian income here in Brazil. I don't know the UK tax laws, but you may have to report it on your UK return as well under "Worldwide Income". That does not necessarily mean to say you'll be taxed on it there. Even if there is no Tax Treaty between Brazil and the UK, you may probably receive a deduction on your UK taxes for those taxes paid to a foreign country, but that is about the only protection you'd have from double taxation in absence of a Treaty. Even if your Brazilian sourced income is not deemed taxable, it may have the unexpected effect of bumping you up into a higher income tax bracket when combined with your UK inome, so it wouuld cause you to pay a proportionally higher tax on your UK income as a result.

The foregoing information presumes that you do have the proper visa for Brazil. You will need a VITEM-V Work Visa, since a VITEM-II Business Visa does not permit you to do paid work in this country.

Cheers,
James      Expat-blog Experts Team

Thank you James for your feedback and was what I thought may be the situation.  Regarding the visa I am about to receive the permanent residency as I did live and work in Brazil for a few years with a previous company before leaving in 2014 so ws able to make the application for this after i left that company and seems to be OK according to the agency I am working with.  I think this one should allow me to work there independently - does that sound ok to you?

Have you already applied for tranformation of your VITEM-V Work Visa into a VIPER Permanent Visa? Generally the VITEM-V isn't made permanent unless you've held it for the full 2 year issue period, renewed it and held the renewal visa for an additional year (uninterrupted), in other words - for 3 consecutive years. If you have not done so, then they may not accept your application due to the interruption in your residency in Brazil.

The only other ways to obtain permanency would be either through marriage or stable union with a Brazilian or permanent resident, having a Brazilian child or investment (min. R$150 thousand - USD $50 thousand) in a Brazilian company or start-up company.

Yes, a VIPER Permanent Visa will permit you to work in Brazil.

Cheers,
James    Expat-blog Experts Team