Expatriate tax in Brazil: residency, the 2026 income tax changes and leaving the country

An executive lands in São Paulo to run the new subsidiary. Within weeks, Brazil may treat them as a tax resident, taxable on income earned anywhere in the world, required to report foreign bank accounts and investments, and, from the 2026 calendar year, potentially subject to a new minimum income tax on high earners. None of this depends on where the salary is paid. It depends on the visa, the employment relationship and the number of days spent in the country. For headquarters, getting the residency date right is what keeps an international assignment from becoming an unplanned tax cost. This guide covers when residency starts, how residents and non-residents are taxed, what Law 15,270/2025 changed in 2026 and what the assignee must file when the assignment ends.

When a foreign executive becomes a Brazilian tax resident

Brazil does not use a single day-count test. Law 9,718/1998, article 12, and the Income Tax Regulation (Decree 9,580/2018, articles 16 and 17) tie residency to the type of entry and the purpose of the stay. The Federal Revenue Service (Receita Federal) summarizes the rules in its official income tax Q&A for 2026:

Two practical consequences follow. First, an executive hired by the Brazilian subsidiary is a resident from day one, even if they plan to stay only one year. Second, someone who keeps a foreign employment contract and travels in and out on a temporary basis is a non-resident until the 184th day. If they do not reach 184 days within 12 months, a new 12-month count starts from the next entry.

One point of attention: the tax rules still use the “permanent visa” and “temporary visa” categories of the old immigration law. Since the Migration Law (Law 13,445/2017), long stays often rely on a residence authorization rather than a permanent visa. Before the move, check with the immigration adviser how the assignee’s actual status fits the tax categories, because that defines the residency date.

How residents and non-residents are taxed

Residents: worldwide income, progressive rates

A resident is taxed on worldwide income. Salary paid by the Brazilian employer has income tax withheld monthly through payroll (IRRF) under the progressive table, which since May 2025 runs from zero up to 27.5% on the monthly taxable base above R$4,664.68, with a deduction of R$908.73 at the top bracket (Law 11,482/2007, as amended by Law 15,191/2025).

Income received from abroad that was not taxed at source in Brazil, such as the part of a salary still paid by the foreign parent in a split payroll, goes through the monthly carnê-leão: the resident calculates and pays the tax personally by the last business day of the month after receipt (Law 7,713/1988, article 8). Foreign-currency income is converted using the Central Bank’s buying rate for the US dollar on the last business day of the first half of the previous month (Law 9,250/1995, article 6). Everything is then reconciled in the annual income tax return.

Investments abroad follow a separate regime since 2024. Under Law 14,754/2023, residents report income from foreign financial investments and from controlled foreign entities separately in the annual return, taxed at 15% with no deductions. For an executive who arrives with a brokerage account or a holding company at home, this is often the most significant change, and it is worth reviewing the portfolio before residency starts.

Non-residents: tax only on Brazilian-source income

A non-resident is taxed only on income from Brazilian sources, generally by withholding. Work income and service fees paid to a resident abroad are subject to a flat 25% withholding tax (Decree 9,580/2018, article 746, based on Law 9,779/1999, article 7). This matters during the first months of a temporary stay and again after the assignee leaves, for example on a bonus paid by the Brazilian company after departure.

Credit for tax paid abroad

A resident can offset income tax paid in another country on the same income only if a tax treaty with that country provides for it or if there is reciprocity of treatment, and the credit is capped at the Brazilian tax attributable to that income (Decree 9,580/2018, article 115). Brazil has no comprehensive income tax treaty with the United States, for example, so relief for US-source income rests on reciprocity. Headquarters should not assume that a credit will be available without checking the specific country.

What Law 15,270/2025 changed from 2026

Law 15,270, of November 26, 2025, amended Law 9,250/1995 with three changes relevant to assignees:

• Relief at the lower end. From January 2026, monthly taxable income up to R$5,000 pays no income tax, and the reduction phases out until it disappears at R$7,350 (new article 3-A). For a typical expatriate salary, this relief is zero.
• Minimum tax on high incomes (IRPFM). From the 2026 calendar year (return filed in 2027), residents whose total income in the year exceeds R$600,000 are subject to a minimum tax. The rate rises linearly from 0% to 10% between R$600,000 and R$1.2 million, using the formula (income ÷ 60,000) − 10, and is 10% from R$1.2 million (new article 16-A).
• Withholding on dividends. Dividends above R$50,000 paid in a month by the same Brazilian company to a resident individual are subject to 10% withholding on the full amount, which is credited against the minimum tax (new article 6-A). Dividends sent abroad are subject to 10% withholding as well, a topic covered in our guide on Brazil’s tax on dividends paid abroad.

The minimum tax base is broad: it includes income taxed exclusively at source, exempt income and income subject to reduced rates, with a closed list of exclusions such as most capital gains, savings accounts and certain incentivized securities. The amount due is then reduced by the income tax already owed in the annual return, the tax withheld on income included in the base and the tax due under Law 14,754/2023, among other items.

Does the minimum tax hit an expatriate executive?

Usually not when income is mostly salary. Consider a hypothetical executive, resident all year, with R$900,000 of salary and no other income. The minimum tax rate would be (900,000 ÷ 60,000) − 10 = 5%, or R$45,000. Salary of that size already generates progressive income tax well above R$45,000, which is deducted, so the additional minimum tax is zero.

The picture changes when a large share of income is lightly taxed or exempt, such as significant dividends or exempt investment income. In those cases, the minimum tax can create an extra liability in the 2027 return. Since the base counts income received in the calendar year, an assignee who becomes resident early in 2026 should have the full year’s income mapped, not just the Brazilian payroll. How foreign taxes interact with the minimum tax for assignees with treaty-country income is a point to confirm with an adviser on each case.

Resident or non-resident: a side-by-side view

At salary level, the difference is smaller than it looks: on R$40,000 a month, the progressive table gives R$10,091.27 before deductions (40,000 × 27.5% − 908.73), close to the R$10,000 of a 25% flat rate. What residency really adds is the scope (worldwide income and foreign investments), the compliance (carnê-leão and the annual return) and, for some profiles, the minimum tax.

Social security: totalization agreements

An executive employed by the Brazilian company is enrolled in the Brazilian social security system (INSS) like any other employee, with the employer contributions described in our guide on the real cost of an employee in Brazil. To avoid paying into two systems at once, Brazil has social security agreements in force with countries including Germany, Belgium, Canada, Chile, South Korea, Spain, the United States, France, Italy, India, Japan, Portugal, Switzerland and others, plus the Mercosur and Ibero-American multilateral agreements, according to the INSS. Under these agreements, a worker posted temporarily can usually remain covered by the home system with a certificate of temporary posting, within the period and conditions of each agreement. The United Kingdom does not appear on the INSS list of agreements in force.

Leaving Brazil: the departure process

An assignee who leaves without formally ending their Brazilian tax residency remains a resident for the first 12 months of absence (Decree 9,580/2018, article 14, §3), which means worldwide income stays taxable in Brazil during that period. The Receita Federal’s 2026 Q&A sets out the steps for a permanent departure:

1. Exit communication (CSDP). File the Comunicação de Saída Definitiva do País online, from the date of departure until the last day of February of the following year. After that deadline, it can no longer be filed.
2. Exit return (DSDP). File the Declaração de Saída Definitiva do País covering income from January 1 until the day before departure, together with any prior-year returns still due. The rule sets the last business day of April of the following year; for departures in 2025, Normative Instruction RFB 2,312/2026 moved it to May 29, 2026, so check the deadline published each year. The simplified deduction is not available in the exit return.
3. Pay the tax in a single installment by the exit return deadline, together with any other outstanding tax debts, which fall due on that date.

Late filing of the exit return carries a penalty of R$165.74 or 1% per month of the tax due, capped at 20% of the tax. After departure, income from Brazilian sources, such as a deferred bonus or rent from a property kept in Brazil, is taxed under the non-resident rules.

A checklist for headquarters before the assignment starts

• Define the employment structure (local contract, secondment or split payroll) knowing that a Brazilian employment contract triggers residency from arrival. Our guide on hiring your first employee in Brazil covers the onboarding steps.
• Map every component of the package (housing, school fees, cars, tax equalization payments) and confirm its tax treatment in Brazil before signing the assignment letter.
• Review the assignee’s foreign investments and holding structures under Law 14,754/2023 before the residency date.
• Check whether a tax treaty or reciprocity applies to income from the home country, and whether a totalization agreement allows the assignee to stay in the home social security system.
• Estimate the 2026 minimum tax exposure if the assignee has significant dividends or exempt income.
• Plan the exit: CSDP by the end of February, exit return by the annual deadline and treatment of payments made after departure.

How Solidy can help

Solidy already serves subsidiaries of multinational companies in Brazil. We run payroll for local and assigned employees, including withholding, eSocial reporting and the treatment of split payroll components, and we coordinate with the group’s global mobility and tax advisers so the Brazilian side of each assignment is handled on time. Talk to our payroll specialists.