# BR Tax on Worldwide Income?



## AfroPrince (Oct 20, 2011)

Hi,

I actually posted this in another thread before realising this forum existed.. Have been looking around for an answer for some time now, but no luck.

As a recent permanent resident of Brazil by marriage, I hear anyone is due to pay tax on worldwide income. I'm recently just finding this out and wanted to find out if there is a way to minimise my exposure to this i.e. avoid double taxation or any if possible. I have a job in the UK and part ownership of property in the UK. 

Do I have to declare this even if I wont be physically in Brazil for less than 2 weeks at a time? Are there any preparations I can make?

Will my Brazilian wife also have to make some form of declaration also?

My plan is to move to BR in future, but not immediately.

Any links, contacts or advice greatly appreciated.


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## BBCWatcher (Dec 28, 2012)

AfroPrince said:


> As a recent permanent resident of Brazil by marriage, I hear anyone is due to pay tax on worldwide income.


According to the tax guides on Brazil that I can find, that is correct. One way that you can become a tax resident of Brazil is if you enter Brazil under a permanent visa. You have to explicitly terminate that permanent status and settle your final tax return to terminate tax residency. (Or die, and then your estate does the same.)



> Do I have to declare this even if I wont be physically in Brazil for less than 2 weeks at a time?


According to the tax guides I've read, yes. No physical presence in Brazil is required, in fact. Once your permanent visa is "activated" (entry into Brazil) you're a tax resident "forever" unless and until you explicitly terminate your permanent status.

Brazil and the United Kingdom do not have an applicable tax treaty. However, Brazil has a foreign tax credit, so at a high level/conceptually you would pay U.K. taxes first on your U.K. source income then pay Brazil additional taxes owed (if any) after taking a foreign tax credit to account for your U.K. taxes. Note that the Brazilian tax year is the calendar year, so you have to allocate U.K. income and taxes (that are "April to April") into a different tax year on the Brazilian side -- not too hard, but just be aware of that. (The U.K. is a bit odd this way.) Income tax rates in Brazil look generally lower than the rates in the U.K., so it's appears unlikely you'll end up owing Brazilian tax if all your income is taxed in the U.K., though capital gains tax treatment of your U.K. property may be quite different when/if you sell it.

It appears (if the tax guides are correct) you do not have to make Brazilian social insurance contributions on your U.K. source income. Just continue contributing to U.K. national insurance per normal.


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## AfroPrince (Oct 20, 2011)

Hi BBCWatcher, you've helped put my mind at ease so thanks very much for your reply. Would you or anyone know how I would go about getting this verified and set up? Or is this something that I would need to pay a professional for? 

Again your help and any others would be very much appreciated


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## BBCWatcher (Dec 28, 2012)

How good is your Brazilian Portuguese?


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## AfroPrince (Oct 20, 2011)

I would say that conversational, but not very formal at all lol


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## BBCWatcher (Dec 28, 2012)

From what I can tell Brazil's tax agency isn't _particularly_ approachable in other languages, so you'll need somebody who is reasonably fluent to handle those tax matters.


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