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Av. Marques de São Vicente, 230 - Conjunto 1220, Barra Funda - São Paulo, SP - Brazil, 01141-010
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Foreign companies operating through a Brazilian entity pay corporate income tax (IRPJ and CSLL) plus consumption and payroll taxes. Foreign individuals pay income tax depending on residency, and payments sent abroad can trigger withholding tax. The exact burden depends on the regime, the activity and any tax treaty.
What taxes does a foreign company pay in Brazil?
- IRPJ: 15%, plus a 10% surtax on profit above R$240,000 per year
- CSLL: 9% for most companies
- Together, these can reach about 34% on actual profit, with different calculations under Lucro Presumido and Simples Nacional
- PIS and COFINS on revenue
- ISS on services, set by each municipality, generally between 2% and 5%
- ICMS on goods, set by each state
- Payroll charges on employees
How is the tax reform changing this?
Brazil is replacing several consumption taxes with a new system (CBS and IBS), through a gradual transition that starts in 2026 and runs until 2033. Companies need to follow the changes to price and contract correctly.
How are foreign individuals taxed?
A foreigner becomes a tax resident with a permanent visa, with a temporary visa and an employment contract, or after staying more than 183 days within a 12 month period. Residents are taxed on worldwide income with progressive rates up to 27.5%. Nonresidents are generally taxed at a flat 25% on Brazilian source income. Income tax thresholds changed for 2026, so confirm the current table.
What happens when you send money abroad?
Payments to foreign related parties or suppliers can trigger withholding income tax, commonly between 15% and 25% depending on the type of payment and any treaty, and may also involve CIDE, PIS and COFINS on imports, and IOF on foreign exchange operations.
Frequently asked questions
Do foreign owners pay tax on Brazilian company profits? The company pays corporate taxes in Brazil. Distributions to foreign owners follow specific rules, so confirm the current treatment before paying dividends.
Can tax treaties reduce the burden? Yes. Brazil has treaties with many countries that reduce or eliminate double taxation. Check whether your country has one and what documents are needed to apply it.
Gescon’s Business Consulting team helps foreign companies map their tax burden before they commit. Contact us for a first review.
