Americans in Brazil tend to hear two things early: that there’s no tax treaty, and that the Receita Federal now taxes money held abroad. Both are true, and neither is as bad as it sounds. Brazil’s rates are high enough that the foreign tax credit wipes out US tax on most Brazilian salaries. The real money gets lost elsewhere, in the fundo your bank manager recommended and the US brokerage account nobody told Brazil about.
Do Americans in Brazil still file a US return?
Yes. US citizens and green-card holders file a Form 1040 every year their worldwide income reaches the filing threshold. For 2025 that’s $15,750 if you’re single and under 65, $400 of net self-employment income if you freelance, and just $5 if you’re married to a Brazilian and file separately. Income you later exclude or offset with credits still counts.
Both countries use the calendar year, and for once the local deadline comes first:
- 1
Every month: carnê-leão
Brazilian tax on income from abroad or from individuals, due the last business day of the following month.
- 2
15 April 2026: US tax payment due
You can file later from abroad, but interest on unpaid tax starts here.
- 3
29 May 2026: DIRPF for 2025
The Brazilian annual return, open since 23 March. A late return costs 1% a month of the tax due, at least R$165.74.
- 4
15 June 2026: US return due for Americans abroad
Automatic if you live outside the US on 15 April. Attach a statement saying you qualify.
- 5
15 October 2026: extended US deadline and the FBAR
File Form 4868 by 15 June to get here. The FBAR extends to the same date automatically.
Our US expat tax guide covers the 1040 itself. This page is about what’s different in Brazil.
When does Brazil treat me as a tax resident?
Sooner than most people expect. Arrive on a permanent visa, or on a temporary visa with a job at a Brazilian employer, and you’re resident from the day you land. On any other temporary visa you become resident once you’ve spent more than 183 days in Brazil within a 12-month period. Digital nomads on the remote-work visa hit that line in about six months. From then on Brazil taxes your worldwide income.
How much does Brazil take, and what’s the DIRPF?
Salary is taxed at progressive rates up to 27.5%, withheld monthly by your employer. The DIRPF (declaração de ajuste anual) settles the year. You choose between itemised deductions, including your INSS contributions and dependents, or a flat 20% discount capped at R$16,754.34. For 2025 the annual table was:
| Annual taxable income (2025) | Rate | Amount to deduct |
|---|---|---|
| Up to R$28,467.20 | 0% | — |
| R$28,467.21 to R$33,919.80 | 7.5% | R$2,135.04 |
| R$33,919.81 to R$45,012.60 | 15% | R$4,679.03 |
| R$45,012.61 to R$55,976.16 | 22.5% | R$8,054.97 |
| Above R$55,976.16 | 27.5% | R$10,853.78 |
That top rate starts at about $10,000 a year. The 13th salary (décimo terceiro) is taxed separately at source and doesn’t go through the annual table, but it’s still Brazilian income tax and still creditable in the US.
If you’re paid from outside Brazil, as a remote employee of a US company or a freelancer with US clients, nobody withholds. You calculate and pay carnê-leão yourself each month on the Receita’s website, and the DIRPF trues it up. This is the gap we see most often with Americans who moved down on a remote job: a clean US return and nothing at all filed in Brazil.
From January 2026, Lei 15.270/2025 removes tax on income up to R$5,000 a month, phases the relief out by R$7,350, and adds a minimum tax on income above R$600,000 a year that reaches 10% at R$1.2 million. None of it touches your 2025 returns.
No treaty with Brazil: so how do I avoid double tax?
With credits on both sides. The US foreign tax credit doesn’t need a treaty; it comes from the tax code, and Brazilian income tax on your salary qualifies. Brazil, for its part, has recognised since 2000 (Ato Declaratório SRF 28) that the US treats it reciprocally, so a Brazilian resident can deduct US federal income tax from the Brazilian tax on the same income. State and local US taxes don’t count on the Brazilian side.
The rule of thumb is simple. Brazilian-source income, which includes pay for work you physically do in Brazil whoever pays it, is taxed first by Brazil and credited by the US. US-source income, such as dividends from a US brokerage account or rent from a house in Texas, is taxed first by the US and credited by Brazil. Having no treaty has one upside, too. There’s no saving clause to work around, because there’s nothing to save.
Should I use the foreign tax credit or the FEIE in Brazil?
For almost anyone earning a real salary in Brazil our default is the foreign tax credit on Form 1116. With 27.5% kicking in at fairly modest income, Brazilian tax usually exceeds the US tax on the same pay, so US tax on it goes to zero and the excess carries forward ten years. You also keep the refundable child tax credit and the ability to fund an IRA.
The foreign earned income exclusion (Form 2555) excludes up to $130,000 of 2025 foreign earnings if you pass the bona fide residence or physical presence test. It suits people whose Brazilian tax is low or delayed: a first partial year, or, from 2026, earners under the new R$5,000 exemption. The housing exclusion adds rent and utilities above the $20,800 base, up to $56,600 in São Paulo under IRS Notice 2025-16. Rio isn’t on the list, so the standard limit of $39,000 applies there and everywhere else in Brazil.
Say you freelance for US clients from Florianópolis
Take Jessica, single, a designer billing US clients $60,000 in 2025, about R$335,580 at the IRS rate. She’s been in Brazil since 2023 on a residence permit.
In Brazil she pays INSS as a self-employed contributor, 20% of the ceiling, about R$19,580 for the year. After deducting it, her income sits in the 27.5% band, and her carnê-leão payments plus the DIRPF come to about R$76,000, or $13,600.
On the US side, $60,000 less the $15,750 standard deduction leaves $44,250 taxable and about $5,070 of tax. The credit wipes it out and she carries forward roughly $8,500. The FEIE would also get her income tax to zero. What neither does is stop self-employment tax: without a Brazilian certificate of coverage she’d owe about $8,480 of US SE tax on top of her INSS. With it, she owes none. We’d file her on the credit and make sure that certificate is in the file.
Illustrative, rounded figures. Brazil converts each payment at the exchange rate on the day she receives it.
Say you’re on R$50,000 a month at a firm in São Paulo
Take Michael, single, employed under a CLT contract at R$50,000 a month. With his 13th salary and the one-third vacation bonus, 2025 pay is about R$666,700, or $119,200. He also has $20,000 of qualified dividends in a Schwab account he kept from home.
His employer withholds roughly R$168,000 of income tax across the year, about $30,000. Before credits, his US tax on the salary is about $17,670. The credit covers all of it and he carries forward about $12,400.
The dividends work the other way round. They’re US-source, so the US taxes them at 15%, about $3,000, with no credit. Brazil taxes them at its own 15% under Law 14.754 in the DIRPF, then lets him deduct the US tax he paid on them, so Brazil collects close to nothing. He pays roughly once. Had he used the FEIE instead, his US bill would still be about $3,000, because dividends aren’t earned income, and he’d lose the carryforward. We’d use the credit.
Illustrative, rounded figures. A real return uses his informe de rendimentos and actual payment dates.
What does Law 14.754 mean for my US brokerage account?
Since January 2024, Brazilian residents pay a flat 15% on income from investments held abroad: interest, dividends, and gains when you sell, including the currency gain measured in reais. It’s reported in its own section of the DIRPF and paid with it, and losses on foreign investments can offset gains. Money sitting in a US checking account that pays no interest is spared the currency piece.
For Americans this matters more than for anyone, because nearly every one of you has a US account. The saving grace is the credit in Michael’s example: Brazil lets you deduct US federal tax paid on the same income. The catch is that unused credit doesn’t carry over, so interest the US taxes at 37% or a gain the US taxes at 0% won’t line up neatly with Brazil’s 15%. Companies you control abroad, such as a US LLC holding investments, can be taxed on their profits every 31 December whether they distribute or not. Talk to us before you move with one.
Which Brazilian investments are PFICs?
Most of what a Brazilian bank will sell you as a fund. Fundos de investimento (renda fixa, multimercado, ações), FIIs, and ETFs listed on B3 such as BOVA11 are, for US purposes, Passive Foreign Investment Companies. Each needs Form 8621 every year, and without an election a sale is taxed at the top US rate for every year you held it, plus interest. The come-cotas withholding Brazil takes from open-ended funds every May and November doesn’t change that.
Direct holdings are fine. CDBs, Tesouro Direto bonds, LCI and LCA are loans, so they’re taxed as interest, and individual shares in Petrobras or Itaú aren’t PFICs. Brazilian dividends were exempt in Brazil for 2025, so they’re fully taxed by the US with no Brazilian credit. They count as qualified only when the stock trades on a US exchange, which in practice means holding the ADR.
Before you say yes to the bank’s fundo
A multimercado fund that makes sense for a Brazilian saver is one of the most expensive things an American can own. If you want Brazilian exposure, hold Tesouro Direto, CDBs or individual shares. If you already own funds, get them onto Form 8621 now and decide on a mark-to-market election deliberately. Waiting only lengthens the period the default rules reach back over.
What about FGTS, PGBL and VGBL?
This is where the law is genuinely unsettled. FGTS is the 8% of salary your employer deposits into a government-run account at Caixa, released on dismissal without cause, a home purchase or retirement. PGBL and VGBL are private pension plans sold by banks and insurers. None of them is a US-qualified plan, and the IRS has never said how any of them should be treated.
Our lean on FGTS is to treat it as a statutory severance fund, taxed when it’s released to you rather than as the deposits go in, and to list the account on the FBAR anyway, which costs nothing. For PGBL and VGBL we assume no US deferral: growth is reported each year, and the funds inside can be PFICs. So we don’t recommend opening one while you’re a US taxpayer, and the Brazilian deduction for PGBL contributions does nothing on your 1040.
INSS, US Social Security and the totalization agreement
The US–Brazil Social Security agreement has been in force since 1 October 2018. Work for a Brazilian employer and you pay INSS, not US Social Security. If a US employer sends you to Brazil for five years or less, you can stay in US Social Security instead. Self-employed people generally pay into the system where they live, so a freelancer in Brazil pays INSS and, with a certificate of coverage, no US SE tax. The agreement also lets either country count your years in the other toward a benefit.
INSS contributions don’t go on Form 1116. Social security taxes paid under a totalization agreement aren’t creditable, even though Brazil lets you deduct them from your income.
Reporting your Brazilian bank accounts
If your non-US accounts together topped $10,000 at any point in 2025, you file an FBAR. In Brazil that’s almost everyone: the conta corrente at Itaú or Bradesco, Nubank, a brokerage at XP or BTG, and anything you can sign on. Brazil signed a reciprocal Model 1 FATCA agreement in 2014, so your bank asks if you’re a US person and reports you through the Receita.
| Form | Who files | Threshold |
|---|---|---|
| FBAR (FinCEN 114) | US citizens and green-card holders | Over $10,000 combined at any time in the year |
| Form 8938 | The same people, with the 1040 | $200,000 at year end or $300,000 at any time ($400,000 / $600,000 joint) |
| DCBE (Banco Central) | Brazilian residents | US$1 million or more of assets abroad on 31 December; the 2026 deadline was 5 April |
Your US accounts don’t go on the FBAR, but they do go in the bens e direitos section of the DIRPF. The FBAR guide covers how to count balances. For the FBAR, convert reais at the Treasury’s year-end rate, not the yearly average.
Leaving Brazil: the saída definitiva
Brazil doesn’t stop treating you as resident just because you’ve left. You file a Comunicação de Saída Definitiva and then a Declaração de Saída Definitiva for the year you go. Skip them and the Receita can keep taxing your worldwide income. Moving back to the US also means picking a state again, and if you kept ties to California or New York, read our state tax guide first.
Behind on US filing from Brazil?
Plenty of Americans in Brazil, especially dual nationals born to a Brazilian parent, find out years late when the bank sends a FATCA form. If it wasn’t willful, the Streamlined Foreign Offshore Procedures let you file three years of returns and six years of FBARs with no penalty, and with Brazilian tax to credit the bill is usually small. Our Streamlined guide explains who qualifies.
What we’d do for you
We start with your informe de rendimentos and your DIRPF, pick the credit or the exclusion on your real numbers, check the certificate of coverage if you’re self-employed, and put every Brazilian account on the FBAR. If there’s a fundo, an FII or a VGBL, we’ll tell you plainly what it costs to keep. See expat pricing for what’s included.