Brazil-United States Tax Guide
A practical guide to the tax framework governing transactions, investments and individuals operating between Brazil and the United States.
Cross-border taxation · No double tax agreement in force · Updated 2026
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New to doing business in Brazil? Our Brazil Tax Guide covers the complete Brazilian tax system: corporate taxes, indirect taxes, employment taxes and the tax reform transition.
Brazil Tax GuideTwo of the Western Hemisphere’s largest economies, still without a tax treaty
Negotiations for a Brazil-US treaty began in the 1990s and stalled over structural differences between Brazil’s hybrid treaty model and the US Model Income Tax Convention. No treaty is in force or at an advanced stage of ratification today. The US foreign tax credit under IRC §§901-909 is the primary mechanism avoiding double taxation, generally keeping the combined burden near the higher of the two countries' rates, but GILTI, Subpart F and the absence of a MAP add real complexity.
This guide covers Brazilian withholding taxes on outbound payments, how those taxes stack on a single transaction, US taxation of Brazil-sourced income (GILTI, Subpart F, FTC), transfer pricing, individuals, and structuring considerations. For advice specific to your situation, contact us.
Having no DTA does not mean being double-taxed, but it does mean paying more attention
In most well-structured arrangements, Brazilian taxes (including the 10% dividend IRRF and 15% interest/royalty IRRF) are creditable against US federal tax, keeping the combined burden near the higher of the two countries' rates. The more significant constraints are the absence of a MAP for transfer pricing disputes, and the overlay of GILTI and Subpart F, which can bring Brazilian profits into US taxable income before distribution.
The main taxes that affect cross-border operations
No single mechanism eliminates double taxation between the two countries; every payment stream must be modelled from both sides.
Brazilian withholding income taxes on payments to US recipients
How Brazilian taxes stack up on a single transaction
Examples use a base contract value of USD 100,000. US figures use a simplified 21% federal corporate rate and exclude GILTI, Subpart F and state taxes.
US taxation of Brazil-sourced income: GILTI, Subpart F and the FTC
The US taxes citizens and corporations on worldwide income, and reaches Brazilian CFC profits through two overlapping regimes before any distribution is made.
Brazil’s new OECD-aligned rules, no MAP with the US
Law 14,596/2023 replaced Brazil’s fixed-margin system with OECD arm’s-length rules, effective from 2024. The US applies IRC §482 and Treasury Regulation §1.482. Both apply independently to any related-party transaction, and disputes cannot be resolved bilaterally.
Thin capitalisation. Brazil restricts interest deductions on related-party debt exceeding prescribed debt-to-equity ratios. This interacts with the new transfer pricing framework and requires attention when structuring US-Brazil intercompany debt.
US citizens in Brazil, Brazilian nationals in the US
Both countries may assert full tax residence simultaneously; three US domestic mechanisms provide partial relief for citizens abroad.
Structuring considerations for US investors in Brazil
Need advice on your Brazil-US tax structure? We can help.
The interaction of US and Brazilian tax rules in the absence of a DTA requires careful, transaction-specific analysis.
More bilateral tax guides
All Guides →This guide is a general overview only and does not constitute legal or tax advice. Tax laws in both countries change frequently. The specific tax treatment of any transaction depends on the facts, the structure adopted and the current state of the law in each jurisdiction. Obtain specific legal and tax advice before structuring any cross-border transaction.
Brazilian lawyers for foreign companies, investors and law firms.