Banking, Money and Taxes in Brazil


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Brazil’s banking sector is efficient and well developed. Expats moving to Brazil can either choose to bank at a local bank in Brazil or they can use an international bank, which allows them to link back to accounts in their home country.
 

Brazilian currency

 
The Brazilian currency is the Real (BRL), which is divided into 100 centavos. There are a number of coins, ranging from one centavo through to one real. Notes are available in a variety of denominations between one and 100 real. 
  • Coins: 1, 5, 10, 25, 50 Centavos and BRL 1
  • Notes: BRL 1, 2, 5, 10, 20, 50 and 100
 

Banking in Brazil

 
Bank cards - Banking, money and taxes in BrazilThe Brazilian banking sector is well developed and expats have a variety of options and services available when it comes to managing their finances. Nevertheless, banking in Brazil can be costly as banks charge users a percentage for every transaction. Expats are advised to shop around to find out which bank will offer them a deal that best suits their needs. 
 
Banking policy is overseen by the Brazilian central bank, Banco Central do Brasil. The largest state-owned banks in Brazil are Banco do Brasil and Caixo, while other local and international banks include Banco Itaú, Bradesco, Santander, HSBC and Citibank.
 
Online banking in Brazil is very popular and it is possible to pay certain utility bills and state taxes online. However, expats should note that most online services are only available in Portuguese.
 
Banking hours in Brazil are generally from Monday to Friday, 10am to 4.30pm. 
 

Opening a bank account in Brazil

A residence visa is required in order to open a bank account in Brazil; once an expat has a visa it is possible to invest in the country’s stock exchange as well as a number of other financial institutions.
 
The documents required for opening a Brazilian bank account usually include a valid identity document, a taxpayer’s number (Cadastro de Pessoa Fisica, CPF) and proof of residence. The documents an applicant will need may differ depending on the bank and the account in question.
 

ATMs and credit cards in Brazil

ATMs are widely available in Brazil, although many don’t accept foreign cards. Customers are also able to make bill payments at ATMs. 
 
For safety reasons, many ATMs do not operate between 10pm and 7am. Those that do operate 27/4 often have lower withdrawal limits after 10pm. 
 
Some parts of Brazil have a largely cash economy, so it’s wise to always ensure that one has sufficient cash on hand. However, debit and credit cards are widely accepted in the larger metropolitan areas, with Visa and MasterCard being the two most widely accepted cards.
 

Taxes in Brazil

 
Brazil has a pay-as-you-earn (PAYE) tax system whereby income tax on income received, whether abroad or locally, is generally paid monthly. Residents who pay income tax in Brazil are also required file an annual income tax return every April.
 
The rate at which expats pay tax in Brazil depends on which visa they hold. For tax purposes, a person is deemed a resident of Brazil if they hold a permanent visa, a temporary visa, or if they stay in Brazil for more than 183 days within a 12-month period.
 
Residents are required to pay tax on their income worldwide and, while Brazil does have treaties in place with a number of countries to avoid double taxation, there is no agreement in place with the USA.
 
Non-residents have to pay a flat rate of 25 percent on any income generated in Brazil, and are not required to file an annual tax return.
 
Individual income tax rates for residents of Brazil are calculated on a progressive scale from 7.5 to 27.5 percent depending on income generated:
 
  • 1 to 21,453 BRL: 0 percent
  • 21,454 to 32,151 BRL: 7.5 percent
  • 32,152 to 42,869 BRL: 15 percent
  • 42,870 to 53,565 BRL: 22.5 percent
  • 53,566 BRL and above: 27.5 percent
 
Employees are also generally required to contribute a percentage of their income to social security, depending on their salary bracket.

Given the complexity of expat taxation, it may be best for new arrivals to consult with a tax professional who is familiar with the tax system in Brazil.

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