Brazil 🇧🇷

Country guides for offering equity compensation to remote employees

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Brazil 🇧🇷
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Introduction

Direct employees

Can receive NSO?

✅ Yes!

General taxation

The tax treatment of stock options is not clear because there’s no specific legislation dealing with stock options and equity awards in general.

Even though taxation isn’t clear, there shouldn’t be any taxation at the time of grant.

Two positions seen in practice for taxation at exercise:

Position 1: There’s a taxation at exercise, on the difference between the fair market value (FMV) of the shares at the time of exercise and the exercise price, which is taxed as any professional income.

Position 2: There’s no taxation at exercise, but only when the grantee sells the shares.

In both cases, at sale, gain would be subject to capital gains tax.

Advice from local counsels is recommended to decide which position to take.

General tax, reporting & legal paperwork difficulty score

🤯 🤯

Tax advantages

There’s no particular tax favored scheme available in Brazil.

However, the potential absence of taxation before sale can be seen as an informal tax advantage.

EoR employees

Can receive NSO?

✅ Yes!

General taxation

The tax treatment of stock options is not clear because there’s no specific legislation dealing with stock options and equity awards in general, even less so for contractors.  

Two positions seen in practice for taxation at exercise:

Position 1: There’s a taxation at exercise, on the difference between the fair market value (FMV) of the shares at the time of exercise and the exercise price, which is taxed as any professional income.

Position 2: There’s no taxation at exercise, but only when the grantee sells the shares.

In both cases, at sale, gain would be subject to capital gains tax.

Personal tax advisor assistance is highly recommended.

General tax, reporting & legal paperwork difficulty score

🤯

Tax advantages

There’s no particular tax favored scheme available in Brazil.

However, the potential absence of taxation before sale can be seen as an informal tax advantage.

Contractors

Can receive NSO?

✅ Yes!

General taxation

The tax treatment of stock options is not clear because there’s no specific legislation dealing with stock options and equity awards in general (because the gains realized could be considered as either income similar to a business income or something closer to capital income).

Even though taxation isn’t clear, there shouldn’t be any taxation at the time of grant.

Two positions seen in practice for taxation at exercise:

Position 1: There’s a taxation at exercise, on the difference between the fair market value (FMV) of the shares at the time of exercise and the exercise price, which is taxed as any professional income.

Position 2: There’s no taxation at exercise, but only when the grantee sells the shares.

In both cases, at sale, gain would be subject to capital gains tax.

Advice from local counsels is recommended to decide which position to take.

General tax, reporting & legal paperwork difficulty score

🤯 🤯

Tax advantages

There’s no particular tax favored scheme available in Brazil.

However, the potential absence of taxation before sale can be seen as an informal tax advantage.

Want to know more about equity in

the

Brazil 🇧🇷

?

Discover everything you need to know about taxation and reporting obligations for you and your team in

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Brazil 🇧🇷

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