EQUITY GUIDE

OFFERING EQUITY TO YOUR TEAM IN

The

Brazil

Looking to offer equity to international talent joining your team? No matter where in the world your team members work, Easop makes it easy for you to offer equity compliantly to direct employees, EoR employees and contractors hassle-free, worry-free, and cost-efficiently!

Firstly, who can receive NSOs?

Direct employees

YES

NO

EOR employees

YES

NO

CONTRACTORS

YES

NO

difficulty score

đźź 

difficulty score

đźź 

difficulty score

đźź 

⚠️  The tax information below is an extremely brief summary for standard situations of the referred relationship, and each situation may of course be different from the norm and have its own specificities. ⚠️

A more comprehensive set of information for this country and work relationship is available on Easop.

If you’re looking for more detailed information in this country (or if you are just curious about our global compliance offering and pricing), get in touch with us and we’ll tell you more about it! 💡

General Taxation

Learn about equity schemes and taxation policies in
the
Brazil
.

It should first be noted that there is no specific legislation regarding stock options, so the gains realized could either be considered income (similar to business income) or something closer to capital gains. That said, here is our best interpretation of the situation:

‍

  • At grant 👉 No taxation.
    ‍
  • At exercise 👉 Taxation at the time of exercise is not clear. The grantee may or may not be taxed, depending on how the tax authorities view the relationship between the employer and the grantee. That said, recent case law tends to suggest there should be no taxation at exercise
    ‍
  • At sale 👉 Regardless of how the tax authority views the relationship between the employer and the grantee, there will be taxation at the time of sale. If there was taxation at exercise, taxation at sale will be determined based on the difference between the sale price and the fair market value (FMV) of the shares at the time of exercise. If there was no taxation at exercise, taxation at sale will be determined based on the difference between the sale price and the exercise price. In both cases, the sale would be subject to capital gains tax.

‍

We're still processing this information for website purposes.  However, if you need answers immediately, the Easop app is always up to date.  Schedule a demo here and we can talk it through!

It should first be noted that there is no specific legislation regarding stock options, so the gains realized could either be considered income (similar to business income) or something closer to capital gains. That said, here is our best interpretation of the situation:

‍

  • At grant 👉 No taxation.
    ‍
  • At exercise 👉 Taxation at the time of exercise is not clear. The grantee may or may not be taxed, depending on how the tax authorities view the relationship between the employer and the grantee. That said, recent case law tends to suggest there should be no taxation at exercise
    ‍
  • At sale 👉 Regardless of how the tax authority views the relationship between the employer and the grantee, there will be taxation at the time of sale. If there was taxation at exercise, taxation at sale will be determined based on the difference between the sale price and the fair market value (FMV) of the shares at the time of exercise. If there was no taxation at exercise, taxation at sale will be determined based on the difference between the sale price and the exercise price. In both cases, the sale would be subject to capital gains tax.

‍

We're still processing this information for website purposes.  However, if you need answers immediately, the Easop app is always up to date.  Schedule a demo here and we can talk it through!

It should first be noted that there is no specific legislation regarding stock options, so the gains realized could either be considered income (similar to business income) or something closer to capital gains. That said, here is our best interpretation of the situation:

‍

  • At grant 👉 No taxation.
    ‍
  • At exercise 👉 Taxation at the time of exercise is not clear. The grantee may or may not be taxed, depending on how the tax authorities view the relationship between the employer and the grantee. That said, recent case law tends to suggest there should be no taxation at exercise
    ‍
  • At sale 👉 Regardless of how the tax authority views the relationship between the employer and the grantee, there will be taxation at the time of sale. If there was taxation at exercise, taxation at sale will be determined based on the difference between the sale price and the fair market value (FMV) of the shares at the time of exercise. If there was no taxation at exercise, taxation at sale will be determined based on the difference between the sale price and the exercise price. In both cases, the sale would be subject to capital gains tax.

‍

We're still processing this information for website purposes.  However, if you need answers immediately, the Easop app is always up to date.  Schedule a demo here and we can talk it through!

Tax advantages

Learn about equity schemes and taxation policies in
the
Brazil
.

There is no tax-favored scheme

We're still processing this information for website purposes.  However, if you need answers immediately, the Easop app is always up to date.  Schedule a demo here and we can talk it through!

There is no tax-favored scheme

‍

We're still processing this information for website purposes.  However, if you need answers immediately, the Easop app is always up to date.  Schedule a demo here and we can talk it through!

There is no tax-favored scheme

‍

We're still processing this information for website purposes.  However, if you need answers immediately, the Easop app is always up to date.  Schedule a demo here and we can talk it through!

Granting equity in 

the 

Brazil

 

Get to know everything about your taxation and reporting obligations in 

the 

Brazil

Introduction

⚠️  The tax information below is an extremely brief summary for standard situations of the referred relationship, and each situation may of course be different from the norm and have its own specificities. ⚠️

A more comprehensive set of information for this country and work relationship is available on Easop.

If you’re looking for more detailed information in this country (or if you are just curious about our global compliance offering and pricing), get in touch with us and we’ll tell you more about it! 💡

Regular employee

You can grant non-qualified stock options (NSO) to direct employees in Brazil.

There are no legal obstacles but the tax treatment of stock options is not clear because there’s no specific legislation dealing with stock options and equity awards in general.

In a nutshell, what does taxation look like?

There’s no specific legislation regarding stock options, so the gains realized could be considered as either income similar to a business income or something closer to a capital income.

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

The taxation at the time of exercise is unclear and there are 2 possibilities depending on how the tax authorities view the relationship between the employer and the grantee.

Regardless of which position is taken, there would be a taxation at the time of sale, either on the difference between the sale price and the fair market value (FMV) of the shares at the time of exercise, or on the difference between the sale price and the exercise price. In both cases, the sale would be subject to capital gains tax.  

Employee via EoR

You can grant non-qualified stock options (NSO) to EoR employees in Brazil.

There are no legal obstacles but the tax treatment of stock options offered to employees employed via an Employer of Record (EoR) is not clear because there’s no specific legislation dealing with stock options and equity awards in general.

In a nutshell, what does taxation look like?

There’s no specific legislation regarding stock options, so the gains realized could be considered as either income similar to a business income or something closer to a capital income.

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

The taxation at the time of exercise is unclear and there are 2 possibilities depending on how the tax authorities view the relationship between the employer and the grantee.

Regardless of which position is taken, there would be a taxation at the time of sale, either on the difference between the sale price and the fair market value (FMV) of the shares at the time of exercise, or on the difference between the sale price and the exercise price. In both cases, the sale would be subject to capital gains tax.  

Contractor

You can grant non-qualified stock options (NSO) to Brazilian contractors. There are no legal obstacles but the tax treatment of stock options offered to contractors is not clear.

Note that granting stock options to contractors could increase the misclassification risk (i.e. the contractor relationship being requalified as an employer-employee relationship, with all tax consequences that can go with it). This will never be the only factor though, what counts primarily for determining the degree of misclassification risk are factors relating to the modalities of the services performed (control over the contractor’s work, exclusivity, term of the services, etc.).

In a nutshell, what does taxation look like?

The taxation of stock options in Brazil is unclear. It’s unclear for employees, and by extension also for contractors.

There’s no specific legislation regarding stock options, so the gains realized could be considered as either income similar to a business income or something closer to a capital income.

In principle, the grantee should only need to pay taxes when they sell the underlying shares. However, there is a chance local tax authorities might require the grantee to pay taxes on exercise as well, depending on how the tax authorities see the relationship between the issuing entity and the contractor.

Pay attention to:

Note that granting stock options to contractors could increase the misclassification risk (i.e. the contractor relationship being requalified as an employer-employee relationship, with all tax consequences that can go with it). This will never be the only factor though, what counts primarily for determining the degree of misclassification risk are factors relating to the modalities of the services performed (control over the contractor’s work, exclusivity, term of the services, etc.).

There's More Detail On

the

Brazil

Inside

Tell us a little about yourself and we'll get you in touch with an expert who can guide you on our product and how it can help your employees in

Brazil

Maze logo
Karat logo
Payflow logo
Levity logo
WeFunder Logo
Folk logo
Slite logo
Djamo logo

Get started with Easop

Schedule a 15-minute product demo with our experts

USA
Algeria
Andorra
Argentina
Australia
Austria
Bangladesh
Belarus
Belgium
Bosnia & Herzegovina
Brazil
Bulgaria
Canada
Central African Republic
Chad
Colombia
Croatia
Cyprus
Czech Republic
Denmark
Ecuador
Egypt
Equatorial Guinea
Estonia
Ethiopia
Finland
France
Gabon
Georgia
Germany
Ghana
Greece
Hong Kong
Hungary
India 🇮🇳
Indonesia
Ireland
Israel
Italy
Ivory Coast
Japan
Kenya
Kosovo
Latvia
Lebanon
Lithuania
Luxembourg
Malta
Mexico
Moldova
Montenegro
Morocco
Netherlands
New Zealand
Nigeria
North Macedonia
Norway
Pakistan
Peru
Philippines
Poland
Portugal
Republic of the Congo
Romania
Senegal
Serbia
Slovakia
Slovenia
South Africa
South Korea
Spain
Sweden
Switzerland
Taiwan
Thailand
Turkey
UAE
Ukraine
United Kingdom
Uruguay
Vietnam

We respect your data. By submitting this form, you agree that we will contact you in relation to our products and services, in accordance with our Privacy policy.

Got it!

Just click the confirmation button in the email we sent and we’ll get you on a call asap.
Oops! Something went wrong while submitting the form.
Maze logo
Karat logo
Payflow logo
Levity logo
WeFunder Logo
Folk logo
Slite logo
Djamo logo