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Tax obligation as digital nomad (Spain-Brazil)

bennyllero

Hi nomads,


I'm from Spain but currently in Brazil from January 2024 with a Digital Nomad visa as a software engineer. If my clients are not from Brazil nor Spain, where am I supposed to pay my taxes?


In one hand, it seems like I should pay in Brazil only for passing more than 183 days in the country, but in other hand, I am not living here permanently (since it's a temporary visa for max 2 years) and I have a "permanent" house in Spain (not the title holder though), I receive the money in my Spanish bank account...etc. So within this context:


  1. Should I notify Spain I will be resident in Brazil for the following 2 years and paying in Brazil only? I guess this would need to also doing everything necessary for being an independent contractor in Brazil (PJ)?
  2. Or can I keep being an independent contractor in Spain ("autónomo"), paying my taxes in Spain and using tax credit in Brazil to deduct?


I appreaciate any help if anyone knows about the matter. Thanks!

See also

The tax system in BrazilTaxes for expats in BrazilUS and Brazil Taxes RevisitedBrazil new Tax law for 2024 for resident and CitizensTrying to educate myself about Brazilian Tax Returns
abthree

07/22/24 @bennyllero.  You're asking at an excellent time.  You will have a Brazilian tax obligation for 2024, but your taxes won't be due until April 30, 2025 (and maybe later, since the due date has been pushed back each year since the pandemic and did not return to normal in 2024) so you have time to plan.


In your place, I would talk to a Brazilian accountant recommended as someone knowledgeable and trustworthy by your Brazilian friends, and discuss your situation with that person.  If Brazil has a tax treaty either with the European Union or with Spain directly your liability will be governed by that treaty; if it does not, the Brazilian constitutional ban on double taxation should give you some protection because of your taxes due to Spain. 


Based on that discussion you'll be in a better position to decide what, if anything, you should communicate to the Spanish authorities.  It will probably be  in your best interest to maintain your current status as a Spanish autónomo, and not try to assume any official status in Brazil aside from Digital Nomad.

bennyllero

@abthree Thank you for the response! My main worry right now is being working as an "autonomo" when I should be working as a "PJ". Or about the "Carne-Leão" tax in Brazil, which is related to freelance work and which should be paid monthly. I don't know if that might be reason enough for fines in the future.


Is your Brazilian accountant/lawyer expert in international taxation? It's because my friends here have no references about that kind of professional and I don't know where to get a proper one.

abthree

07/22/24 @bennyllero.  No, my Brazilian accountant is not an expert in international taxation, although she's capable and proactive about researching any unfamiliar issues that come up.  Part of my definition of "competent and trustworthy" in the description above would include ability and willingness to do that kind of research; your friends may know someone with those qualifications.  The research should start with determining whether any relevant tax treaties exist and how they apply.  I pay income taxes in Brazil and the United States and they do not have a tax treaty, so that has never been an issue for me.


One of the services that an accountant can provide is helping to determine whether and to what extent you're  required to pay your taxes in advance.  Mine determined back in 2017 that I was a "Profissional Liberal" and so not required to use the "Carne-Leão"; I've been paying my taxes in full simultaneously with filing my annual return every year since then, and never received any negative feedback.  Of course, many people would opt to pay in monthly installments than to have to come up with the whole nut in April regardless.


As I wrote, you're thinking about your taxes at the perfect time.  Attention is always justified, but worry isn't:  it's too soon for you to have committed any infractions yet, and with the right professional help you'll be able to come up with a plan of action that you can live with and that will keep you on the right side of the Receita Federal. 

bennyllero

@abthree Thank you for the info again! I didn't know the "Profissional Liberal" classification, that I might belong to as well. This Brazilian tax system is complex!