Social security compliance

When working remotely abroad, your employees may become subject to the social security scheme of the destination country, which means you, asan employer, would need to pay social security premiums accordingly. Brazil's social security system is administered by the INSS (Instituto Nacional doSeguro Social). Brazil has entered into bilateral social security agreements with various countries to help prevent the payment of double social securitycontributions. Whether a bilateral agreement applies depends on the employee'scountry of origin — employers should verify whether such an agreement exists between Brazil and the relevant home country.

Where a bilateral agreement is in place, employees temporarily posted to Brazil can generally remain insured under the home country's socialsecurity system for a defined period, provided they hold a valid Certificate ofCoverage (CoC) issued by the relevant home country authority. Employers shouldverify the specific terms and duration limits of the applicable agreement. More information here.

‍

Tax compliance

Brazil has signed bilateral tax treaties with a number of countries that specify the steps to take to avoid double taxation, available here. However, Brazil's tax treaty network is relatively limited compared to many other economies — employers should verify whether a Double Taxation Agreement (DTA) exists between Brazil and the employee's home country, as this directly affects the tax treatment of employment income. These treaties generally follow international standards and provide guidelines for various types of income, including employment income.

Despite the existence of many tax treaties, the issue of Permanent Establishment remains a significant compliance concern for employers with employees temporarily working in Brazil, whether for a workation, a business trip, or an assignment. If a travelling employee is deemed to constitute a Permanent Establishment in the destination country, the employer may be required to register the company locally, allocate profits to the local business (branch), and file corporate taxes, leading to substantial administrative burdens.

To avoid this scenario, here are some key strategies:

If your employees are travelling for a workation, they should refrain from negotiating or signing sales contracts during the trip. Additionally, they should avoid visiting clients or any office, including the employer's local office in the destination country. Following these guidelines will help mitigate the important compliance risk for the employer related to permanent establishment.

Bei Dienstreisen kann es schwierig sein, die oben genannten Aktivitäten zu vermeiden. In diesem Fall empfiehlt sich eine Abstimmung mit der (steuerlichen) Compliance-Abteilung. WorkFlex-Nutzende können dieses Thema direkt über die WorkFlex-Plattform abwickeln.

Bei ein Assignment in Brasilien ist das Betriebsstättenrisiko deutlich erhöht. Aufgrund der Dauer und Art der Assignment-Aktivitäten – wie die Vertretung des Arbeitgebers, die Leitung lokaler Teams oder der Abschluss von Verträgen – ist die Begründung einer Betriebsstätte sehr wahrscheinlich. Darüber hinaus gelten Mitarbeitende, die innerhalb eines 12-Monats-Zeitraums mehr als 183 Tage in Brasilien verbringen, als brasilianische Steuerresidente und werden mit ihrem weltweiten Einkommen der brasilianischen Einkommensteuer unterworfen. Arbeitgeber wird dringend empfohlen, vor Beginn des Assignments eine Betriebsstättenrisikoanalyse durchzuführen und eine Tax Equalisation Policy zu implementieren. WorkFlex-Nutzende können dieses Thema direkt über die WorkFlex-Plattform abwickeln.

‍

Overriding local employment provisions

Mitarbeitende, die nach Brasilien reisen, müssen bestimmte grundlegende lokale Beschäftigungsvorschriften einhalten, die als zwingendes Recht gelten können – wie z. B. Mindestlohnstandards. Die Arbeitsbeziehungen in Brasilien werden durch die Consolidação das Leis do Trabalho (CLT) geregelt, die für alle Mitarbeitenden gilt, die in Brasilien tätig sind – unabhängig vom Heimatland des Arbeitgebers. Aktuelle Informationen zum Mindestlohn in Brasilien hier abrufen.

‍

When traveling to Brazil for work—whether for a short business trip or an extended workation—it's essential to have comprehensive health insurance coverage to ensure access to medical care.

For business trips, the employer typically arranges the employee's travel health insurance. However, for workations, these responsibilities can be less clear. WorkFlex takes care of travel health insurance for trips worldwide to ensure there are no costly consequences for either the employee or the employer if accidents occur while working abroad.

‍

For travelers using WorkFlex‍

If you’re traveling with WorkFlex, comprehensive health insurance is automatically included if your employer has activated this feature. For more details, please refer to your trip request on the WorkFlex platform.

For other travelers

Ensure you have travel health insurance with worldwide coverage, whether for a workation or business trip, so that you can receive adequate medical treatment in case of an emergency.

‍