The differences between the Brazilian and US Tax System

- May/2018

As April 30 was the deadline for filing income tax returns in Brazil, the tax season is now officially over. The Brazilian “Receita Federal” expects to have collected approximately 28.8 million declarations this year. Any taxpayer who did not file this declaration by the deadline will be subject to a fine. Naturally, taxes represent a large share of all goods and services produced in Brazil.

Once Brazilians decide to invest or even immigrate to the US, some special care must be taken, since the US tax system is different from the Brazilian system.  As such, the advice of a specialized professionals is paramount so that taxpayers do not end up incurring additional burdens unnecessarily.

One notable difference between the US and Brazilian systems is that, in Brazil, the Income Tax is only charged at the federal level, while in the US, the Income Tax can be charged at the federal, state or even “municipal” levels. As in Brazil, the legislation allows the possibility of using certain deductions for the purpose of determining the basis of calculation of the American income tax, for both individuals and corporations.

Due to its complexity, the systematic deduction of expenses is a matter of extreme importance for those who decide to invest and live in the USA. A few examples of expenses deductions for individuals include payment of interest on some types of financing, payment of state and local taxes, donations to charities, and payment of medical expenses.

It is also important to remember that, unlike in Brazil, income earned by citizens and foreigners residing in the US is taxed by the US government regardless of where it was acquired. However, even in the absence of a treaty between the two countries, there are possibilities to avoid double taxation of income.

If you have questions about taxation or need assistance filing and filing an income tax, please do not hesitate to contact HAYMAN-WOODWARD. Our experienced tax advisors can guide you through every step of your process.

If you have plans to internationalize your investments, develop business, and begin your expatriation process, it is important to have a team of lawyers with proven experience, acting in several jurisdictions and accredited by their respective governments. Our highly specialized professionals possess the technical skills required to evaluate the best alternatives and meet your needs and expectations.

To know which immigration option best suits your profile and that of your family, in addition to knowing more about the many possible alternatives for your projects to develop successfully, talk to one of our expert attorneys. Schedule a consultation with HAYMAN-WOODWARD now.

Our attorneys will assist you in all the details of your expatriation, at all stages, including business development in the United States. For our law firm, each case is unique and is treated as such, with personalized and individualized solutions.

HAYMAN-WOODWARD PLLC is a Washington (D.C) based law firm, specializing in immigration and federal tax laws. All legal services are provided by duly-licensed attorneys in each jurisdiction.

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