Guide to Global Payroll Management * employer-paid meals; * interest on below market loans; and * company provided security guards. Tax rates Income taxes. Income tax rates for residents range from 0% to 27.5% of monthly taxable income. Nonresidents are taxed on Brazilian-source income at a flat 25% withholding rate (no deductions are allowed). Social security taxes. Social security taxes are withheld from Brazilian-source wages at the rate of 8% to 11% of the employee's monthly gross salary up to a prescribed maximum (BRL 642.34 per month). Employers contribute 20% or 22.5% of gross salary with no wage base limitation, depending on the industry. Relief from double taxes An individual may be entitled to a credit from Brazilian income tax for foreign tax paid on non-Brazilian-source income if the other country provides reciprocal treatment to Braziliansource income. The credit cannot exceed the difference between the Brazilian income tax calculated without the inclusion of the foreign income and the Brazilian income tax calculated with its inclusion. Brazil has a totalization agreement (see Appendix B, page B-6) with the U.S. CHILE CHILE Basis for tax Residents and domiciliaries of Chile are subject to tax on their worldwide income. Foreign nationals in Chile for more than six months are subject to tax only on their Chile-source income during the first three years (extensions are possible) of residence in Chile and thereafter on their worldwide income. Residence rules An individual present in Chile for six continuous months in one tax year or six months in two consecutive tax years, continuous or not, is a resident. Domicile is defined as residence in a place with the intention of staying there. Intention can be established by facts and circumstances, including accepting employment in the country or moving one's family into Chile. Taxable employment income Taxable employment income includes any compensation received under a contract of employment, including entertainment expenses. Board and lodging provided by the employer for its convenience are exempt. Family allowance payments, social security benefits and severance payments are excluded from taxable income. Fringe benefits. Employees are subject to tax on home leave benefits. Employer-paid club membership dues and servant or chauffeur wages are also taxable income unless demonstrated as provided solely for a business purpose. C-8