Taxation of non-residents: rules changed for Social Security and alimony beneficiaries

Retirees receiving benefits from the Brazilian General Social Security Regime (RGPS) with “IR Exterior” status will be taxed based on the progressive tax table, while alimony beneficiaries will be exempt

Dirben/INSS Ordinance No. 1,334/2026, published on March 10, amended the rules governing benefits and services under the Brazilian General Social Security System (RGPS) administered by the National Institute of Social Security (INSS) for beneficiaries with information regarding foreign income tax (IR Exterior).

The amendment provides that beneficiaries’ income will be subject to withholding income tax (IRRF) based on the progressive tax brackets set forth in RFB Regulatory Instruction No. 1,500/2014, which are the same as those applicable to insured persons residing in Brazil. In addition, the ordinance establishes that recipients of alimony are exempt from IRRF taxation (previously, the rate was 15%).

Judicial understanding

The publication of the Ordinance is in line with the decision of the Federal Supreme Court (STF), which deemed unconstitutional the fixed collection of Income Tax on pensions and retirement benefits paid to beneficiaries residing abroad.

The Supreme Court ruled that applying a flat 25% income tax rate to these taxpayers is unconstitutional because it violates the principles of equal treatment and the prohibition against confiscation.

Therefore, with this administrative ruling, the INSS is adjusting its procedures so that benefits paid to insured individuals residing outside the country will now follow the same taxation rules applied in Brazil.

Important Note

Taxpayers who have had this deduction applied may be entitled to a refund of amounts overpaid in the last 5 years, through an administrative or judicial proceeding.

Tax Advisory Services

Domingues e Pinho Contadores provides tax advisory services to help individuals adapt to changes in the Brazilian tax landscape. You can count on the support of DPC Private, our specialized team, via email dpc@dpc.com.br.