The short version
If you are an American planning a move to Brazil, there is one structural fact that shapes almost everything else about your taxes, and most people never hear it until they are already there: the United States and Brazil do not have an income tax treaty. The two countries have never signed one. That single absence quietly removes a set of protections that Americans in treaty countries take for granted, and it changes how you avoid being taxed twice on the same income.
This does not mean you will be double taxed. It means the tools you use to prevent double tax are different, and narrower. Without a treaty, you lean entirely on two ordinary mechanisms in the US tax code, the foreign tax credit and the foreign earned income exclusion, to keep Brazil and the IRS from each taxing the same dollar. There is one piece of genuinely good news, and it is not small: the United States and Brazil do have a Social Security totalization agreement, in force since 2018, so you are not paying into both countries’ social security systems on the same earnings. This article walks what no treaty actually costs in practice, what the totalization agreement saves you, and how the rest of the Brazil move fits around both.
What the law actually says (primary authority first)
Start with the fact itself, because it is easy to assume a treaty exists when it does not. The IRS publishes a master list, United States Income Tax Treaties A to Z, of every country with which the United States has an income tax treaty in force. You can read the full A to Z list on IRS.gov, and Brazil is not on it. There is no US-Brazil income tax treaty to invoke, no treaty article to cite, and no treaty position to take on a Form 8833. For an American in Brazil, the treaty toolbox is simply empty.
That matters because of what an income tax treaty normally does. A treaty between the United States and a partner country typically provides a residency tie-breaker, so that when both countries would treat you as a tax resident, a defined set of rules decides which one wins for treaty purposes. A treaty usually reduces the withholding rates each country can charge on cross-border dividends, interest, royalties, and pensions. A treaty often re-sources certain income so the credit math works cleanly, and it provides a formal channel, the competent authority process, to resolve a genuine double-tax dispute between the two governments. With Brazil, you get none of that. You are a US tax resident under US law and a Brazilian tax resident under Brazilian law, and nothing reconciles the two for you.
So how do you avoid being taxed twice? Through two provisions of the US Internal Revenue Code that work whether or not a treaty exists. The first is the foreign tax credit under Internal Revenue Code section 901, claimed on Form 1116. It gives you a dollar-for-dollar credit against your US tax for income tax you already paid to Brazil, subject to a limitation under section 904 that caps the credit at the US tax attributable to your foreign income. The second is the foreign earned income exclusion under Internal Revenue Code section 911, claimed on Form 2555, which lets a qualifying person abroad exclude a block of foreign earned income from US tax entirely. For tax year 2025 the maximum exclusion is 130,000 dollars per qualifying person. These two are your double-tax relief. There is no third lever a treaty would have handed you.
There is one important exception to the no-relief picture, and it sits on the Social Security side rather than the income tax side. The United States and Brazil signed a Social Security totalization agreement that, by the Social Security Administration’s own notice in the Federal Register, entered into force effective October 1, 2018. Totalization agreements exist, in the IRS’s words, for the purpose of avoiding double taxation of income with respect to social security taxes. The Brazil agreement does two things that matter to a working American. It stops the same earnings from being charged into both countries’ social security systems at once, which without an agreement can mean paying twice over. And it lets you combine, or totalize, your work credits across both systems so that time worked in Brazil can help you qualify for a US benefit, and the reverse. This is the one treaty-style protection Americans in Brazil actually do get, and for a self-employed person especially, it is worth real money.
How it works in practice
Put the pieces together with a concrete picture. Suppose you move to São Paulo, become a Brazilian tax resident, and earn the equivalent of about 110,000 US dollars working for a Brazilian employer. Brazil taxes residents on worldwide income, with a top individual rate of 27.5 percent, so you are paying meaningful Brazilian tax. The United States still taxes you too, because US citizens are taxed on worldwide income no matter where they live. Two countries, one paycheck. Here is how you keep from paying full tax twice.
First, the foreign earned income exclusion. If you meet the bona fide residence test or the physical presence test, you can exclude up to 130,000 dollars of your foreign earned wages for 2025 on Form 2555. In this example that covers your salary, so the wage income itself drops out of the US tax base. Note one thing the exclusion does not do, and it is a common shock: excluding your wages under section 911 does not reduce self-employment tax if you are self-employed, because you must count all your self-employment income even when the foreign earned income exclusion removes it for income tax. That is where the totalization agreement earns its keep, which I come back to below.
Second, the foreign tax credit. For income the exclusion did not remove, say investment income or wages above the exclusion cap, you claim a credit on Form 1116 for the Brazilian income tax you paid on that same income. Because Brazil’s top rate of 27.5 percent is in the same neighborhood as US rates, the credit generally absorbs the residual US tax on that income, though the section 904 limitation and the interaction with the exclusion require careful calculation rather than a guess. The practical result for most people on these facts is little or no net US income tax. What you do not have, and would have in a treaty country, is a reduced Brazilian or US withholding rate on cross-border investment income, or a tie-breaker to spare you from being a tax resident of both places at once. You manage entirely with the credit and the exclusion.
Third, Social Security. Because the totalization agreement is in force, your earnings are assigned to one country’s system rather than both. A US citizen working in Brazil for a Brazilian employer generally pays into the Brazilian system and is exempt from US Social Security and Medicare tax on those earnings, and a certificate of coverage issued under the agreement documents which system you belong to. For a self-employed American this is the difference between paying one country’s social-tax and paying two. Without the agreement, a self-employed expat can owe US self-employment tax of 15.3 percent that the exclusion does not touch, on top of the Brazilian charge. With it, you are covered under one system and carry the certificate to prove it.
A few Brazil-specific realities sit alongside the tax math and deserve their own articles, which is why I have written them as companion pieces. Your Brazilian tax residency does not begin casually: on a temporary visa it triggers once you spend 183 days in Brazil within a twelve-month period, while a permanent visa makes you a resident from the day you arrive. Bringing your household goods in duty-free has its own customs regime with strict timing, and your car is treated differently from your furniture. And a Brazilian brokerage account holding local funds can quietly turn into a US passive foreign investment company problem, which is its own tax trap. None of those are softened by a treaty either, because there is no treaty.
The numbers
The clearest way to see what no treaty costs is to line up what an income tax treaty normally provides against what an American in Brazil actually has to work with. Every protection in the left column is something Americans in treaty countries rely on; the right column is the Brazil reality.
| What a US income tax treaty normally provides | What you actually get with Brazil (no income tax treaty) | The tool you use instead | Authority |
|---|---|---|---|
| Residency tie-breaker when both countries claim you | None; you can be a tax resident of both the US and Brazil at once | US residency rules and Brazil’s 183-day or permanent-visa test, unreconciled | IRS Treaties A to Z (Brazil absent); IRC 7701(b) |
| Reduced withholding on cross-border dividends, interest, royalties, pensions | None; statutory rates apply with no treaty reduction | Foreign tax credit on the income, where available | IRS Treaties A to Z (Brazil absent); IRC 901 |
| Treaty re-sourcing to make the credit calculation work cleanly | None | Section 904 foreign-tax-credit limitation, computed without re-sourcing help | IRC 904 |
| Competent authority process to resolve a double-tax dispute | None | Self-help through the credit and the exclusion | IRS Treaties A to Z (Brazil absent) |
| Relief from double income tax generally | Delivered only by the credit and the exclusion, not a treaty | Form 1116 (credit) and Form 2555 (exclusion) | IRC 901; IRC 911 |
| Foreign earned income exclusion, 2025 maximum | 130,000 USD per qualifying person, available with or without a treaty | Form 2555 | IRC 911; IRS FEIE figures |
| Coordination of Social Security so you are not charged by both systems | Available; the US-Brazil totalization agreement is in force since October 1, 2018 | Certificate of coverage | Federal Register, SSA notice (FR-2018-10-16) |
Read the table top to bottom and the shape is plain. On the income tax side, almost every treaty protection reads “none,” and you replace each one with self-help through Form 1116 and Form 2555. On the Social Security side, the one row that reads “available” is the totalization agreement, and that is the single structural break Americans in Brazil actually get.
What this means for you
A few practical points if Brazil is your destination.
First, plan your double-tax relief deliberately, because no treaty will catch your mistakes. In a treaty country a misstep can sometimes be cured by a treaty position. In Brazil, the foreign tax credit and the foreign earned income exclusion are the entire safety net, and the choice between leaning on the exclusion, the credit, or a deliberate combination of both is a real decision with real dollar consequences. As a rough orientation, a high-tax setting tends to favor the credit and a low-tax setting tends to favor the exclusion, but the section 904 limitation and the way the two provisions interact mean the right answer comes from running your actual numbers, not from a rule of thumb.
Second, treat the totalization agreement as a benefit to claim, not a footnote. If you are employed in Brazil or self-employed there, the agreement determines which country’s social security system you pay into, and the certificate of coverage is the document that proves it. For a self-employed American this is the difference between one social-tax bill and two, and the foreign earned income exclusion will not rescue you from US self-employment tax if you skip it. Getting the coverage question right early is worth more than most people expect.
Third, the absence of a treaty raises the stakes on everything adjacent, so sequence the move. When you become a Brazilian tax resident, how you bring in household goods, and whether your Brazilian investments create a passive foreign investment company problem are all questions that no treaty will simplify. Walking through them in order, before you have triggered residency or shipped your life south, is far easier than untangling them afterward. That sequencing is exactly what a pre-move review is for.
Related reading
Companion pieces in the Brazil country track of The American Expat Tax Lifecycle:
- Brazilian Tax Residency and the 183-Day Trap: When Brazil Starts Taxing Your Worldwide Income.
- Shipping Your Life to Brazil: The Mudança Customs Rules and Why Your Car May Not Qualify.
- The Foreign Mutual Fund Trap: Why Your Brazilian Brokerage Account Can Be a PFIC Tax Bomb.
- Retiring to Brazil: How the Totalization Agreement Makes Your Social Security Work.
And from the cornerstone of the series:
- You Probably Owe Nothing, But Silence Still Costs You: the filing duty that follows every American abroad.
For the underlying authorities, see the inline links above to the IRS list of US income tax treaties (which shows Brazil’s absence), Internal Revenue Code section 901 and section 911, and the Federal Register notice that the US-Brazil totalization agreement took effect October 1, 2018.
How Sheepdog Tax can help
I am a CPA and Certified Fraud Examiner, and this is a veteran-owned practice. The thing I most often have to explain to someone moving to Brazil is that the missing treaty is not a reason to panic, but it is a reason to plan, because the credit and the exclusion are doing all the work a treaty would otherwise share. Getting the foreign tax credit and the foreign earned income exclusion set up correctly, and claiming the totalization coverage you are entitled to, is most of the battle.
A good first step is a short, no-pressure Brazil move tax-readiness review: a plain look at your income, where it will be sourced, how the foreign tax credit and the exclusion will interact for your facts, and how the totalization agreement applies to your work situation. Every situation is different, and I do not promise a particular result. What I offer is an honest reading of where you stand before you go, and a clear plan for handling a move to a country the US has no tax treaty with. To start, reach me at noah@sheepdogtax.com.
Sources (primary authority first, then secondary commentary)
- IRS, United States Income Tax Treaties A to Z (master list; Brazil does not appear, confirming no income tax treaty). https://www.irs.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z
- 26 U.S.C. 901, Taxes of foreign countries and of possessions of United States (foreign tax credit). https://www.law.cornell.edu/uscode/text/26/901
- 26 U.S.C. 904, Limitation on credit (foreign tax credit limitation). https://www.law.cornell.edu/uscode/text/26/904
- IRS, About Form 1116, Foreign Tax Credit. https://www.irs.gov/forms-pubs/about-form-1116
- 26 U.S.C. 911, Citizens or residents of the United States living abroad (foreign earned income exclusion). https://www.law.cornell.edu/uscode/text/26/911
- IRS, About Form 2555, Foreign Earned Income. https://www.irs.gov/forms-pubs/about-form-2555
- IRS, Figuring the Foreign Earned Income Exclusion (2025 maximum 130,000 USD). https://www.irs.gov/individuals/international-taxpayers/figuring-the-foreign-earned-income-exclusion
- IRS, Self-Employment Tax (Social Security and Medicare Taxes) for Businesses Abroad (foreign earned income exclusion does not reduce self-employment tax). https://www.irs.gov/individuals/international-taxpayers/self-employment-tax-for-businesses-abroad
- 26 U.S.C. 7701(b), Definition of resident alien and nonresident alien (US residency tests; no treaty tie-breaker with Brazil). https://www.law.cornell.edu/uscode/text/26/7701
- Social Security Administration, Federal Register notice, Agreement on Social Security Between the United States and Brazil, effective October 1, 2018 (83 FR 52298, Oct. 16, 2018). https://www.govinfo.gov/content/pkg/FR-2018-10-16/html/2018-22509.htm
- IRS, Totalization Agreements (purpose is to avoid double taxation of income with respect to social security taxes). https://www.irs.gov/individuals/international-taxpayers/totalization-agreements
Prepared by Noah Green, CPA, CFE.