WHAT DOES THIS MEAN TO YOU?
Americans living and working in Brazil on expatriate assignments to Brazil or self-employed has had the tax burden of the Brazilian government collecting payroll taxes, income taxes and sociality security taxes.
Until recently, there was no way to mitigate the effect of social security double taxation on the expat’s compensation in Brazil. The American would be subject to regular U.S. social security tax and also Brazil’s social security taxation on the same compensation income. Now there is relief in the form of a Social Security Totalization agreement with Brazil. According to a fact sheet issued by the White House, the agreement “will eliminate dual Social Security contributions, which occur when a worker from one county works in another country” and “close the gaps in benefit protections for workers who divide their careers between the United States and Brazil.” This Agreement was signed by the White House of June 30, 2015, but the exact details and its effective application to which years is still unclear. Since the Agreement was signed on June 30, 2015, it may be retroactively applied to 2015. However, at this point we are unclear.