Retiring in Brazil
Brazil: the tax picture for FIRE
Brazil's income tax (IRPF) gives residents an exempt allowance of about BRL 27,110 a year; above it, progressive bands run from 7.5% to a top rate of 27.5%, reached above roughly BRL 4,665 a month — the brackets are officially monthly, so Ember annualises them by twelve. Capital gains sit on a separate schedule: Ember models a flat 15% with no annual exemption — the real schedule progresses to 17.5–22.5% on gains over R$5m — and foreign financial investments are taxed at a flat 15% each year under Law 14,754/2023, the pre-residency acquisition exemption having been revoked.
On death, state-level ITCMD inheritance and gift tax of up to 8% applies — separate from income tax and not yet modelled in Ember's estate layer. Ember's cost-of-living factor for Brazil is 0.48 — a low-confidence figure. No UK–Brazil pension treaty method is coded; foreign-source income, including UK pensions, falls under mandatory monthly carnê-leão self-assessment, which Ember doesn't model. This pack is a medium-confidence draft: INSS contributions and standard or itemised deductions aren't modelled — both reduce the real taxable base — and unindexed brackets may lag by 2026.
Income tax (2026)medium confidence
Tax-free allowance: R$60,000 (then bands apply to income above it).
| Band (above allowance) | Rate |
|---|---|
| R$0 – R$3 | 0% |
| R$3 – R$9,970 | 27.6% |
| R$9,970 – R$28,200 | 31.6% |
| above R$28,200 | 27.5% |
What this model doesn’t capture (11)
- Models the DEFINITIVE ANNUAL liability (ajuste anual, Lei 15.270/2025 Art. 11-A) as synthetic effective brackets: income up to R$60.000/yr exempt, taper to R$88.200 at effective 27.5575%/31.5575%, then the 27.5% top rate. See the header derivation.
- Monthly withholding (IRRF mensal) timing NOT modelled: in-year withholding (tabela mensal + Art. 3o-A monthly redutor, ×12) is HIGHER than the definitive annual liability and reconciles at the annual return as a refund (restituição). This pack models the definitive Art. 11-A annual liability, not the cash-flow timing of withholding.
- INSS social security contributions (progressive ~7.5%-14%, wage-capped) -- mandatory payroll deduction, not modelled; substantially reduces the taxable base for employees/pensioners (would lower tax further).
- Desconto simplificado: the ANNUAL 20%-of-income discount capped at R$17.640,00 is baked into the synthetic brackets (it is the standard election). Itemised legal deductions (dependants R$2.275,08 each, education R$3.561,50, health, private-pension PGBL up to 12%) are NOT modelled -- taxpayers whose legal deductions exceed the 20%-capped simplified discount pay LESS than this pack shows.
- Lei 15.270/2025 high-income provisions NOT modelled: (a) 10% withholding (IRRFDIV) on dividends over R$50.000/mo from a single payer; (b) the minimum tax on high incomes (IRPFM) phasing in over R$600.000/yr up to full at R$1.200.000/yr. Both are out of scope here.
- Capital gains taxed on a separate progressive 15%-22,5% schedule (not this table).
- State ITCMD inheritance/gift tax (up to 8%) and municipal ITBI property transfer (up to 3%) are separate, not income tax.
- No wealth tax in Brazil.
- Single-filer basis; Brazil allows joint/separate election with dependant deductions -- not modelled.
- carne-leao (mandatory monthly self-assessment on foreign-source income, incl. UK pensions) -- mechanics not modelled; the simplified-discount election above may not apply to all foreign-source income.
- selfEmployment: no regime module — self-employed social contributions / business-income surcharges for this jurisdiction are not modelled
Capital gainsmedium confidence
Capital gains are taxed at a flat 15%.
15% standard; gains over R$5m taxed progressively 17.5–22.5%. Foreign financial investments flat 15%/yr (Law 14,754/2023), no exemption — pre-residency acquisition exemption revoked. Monthly small-sales exemptions (R$35k general / R$20k B3 shares) are domestic-only and not modelled.
Inheritance & estate taxmedium confidence
Tax is charged on each recipient, scaled by their relationship to the deceased.
Recipient-side ITCMD, legislated per state (26 states + DF) under a federal 8% ceiling (Senate Resolution 9/1992, unchanged by EC 132/2023). No relationship-based exemptions — spouse, child, sibling and stranger all face the same schedule (a surviving spouse's community-property half-share is a civil-law division, not a tax exemption), so all four classes carry identical bands. This pack wires Rio de Janeiro's progressive scale (4% ≤ R$500k / 6% R$500k–R$2m / 8% > R$2m) as the representative state now that EC 132/2023 makes progressive bands constitutionally mandatory.
Cost of living
48%
of a UK baseline (100%) — a rough, illustrative comparison, not a forecast.
Common questions
How are capital gains taxed in Brazil?
Ember models capital gains on a separate schedule from the income-tax table, at a flat 15% with no annual exemption; in reality gains over R$5m are taxed progressively at 17.5–22.5%, which the flat-rate model doesn't capture. Foreign financial investments are taxed at a flat 15% per year under Law 14,754/2023 with no exemption — the pre-residency acquisition exemption has been revoked. Brazil's monthly small-sales exemptions (R$35,000 general, R$20,000 for B3-listed shares) are domestic-only and aren't modelled, and dividends — currently exempt, with a reform to tax them pending from 2026 — aren't modelled either. Confidence in this capital-gains data is medium.
Will my UK pension be taxed in Brazil?
Ember's data codes no UK–Brazil treaty method for pensions, so no treaty relief is modelled. The pack notes that foreign-source income — explicitly including UK pensions — is subject to Brazil's mandatory monthly carnê-leão self-assessment, whose mechanics aren't modelled. Under the annualised IRPF scale, income above the roughly BRL 27,110 allowance is taxed at 7.5% up to a top rate of 27.5% — a draft, medium-confidence picture rather than a filing answer.
Is there inheritance tax in Brazil?
Yes, at state level: Brazil levies ITCMD, a state inheritance and gift tax of up to 8%, which is separate from income tax (municipal ITBI of up to 3% applies to property transfers). Ember has no estate pack coded for Brazil yet, so death transfers aren't modelled in projections. The data also notes Brazil has no wealth tax.
What does Brazil do to your FIRE date?
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