Normative Resolution #84 - FGTS over foreign portion of salary for expats

The Ministry of Labor and Employment has published the Normative Resolution No. 84, of July 13^th 2010, which foresees regarding the inspection on the payment of the Guarantee Fund for Length of Service (FGTS).

The Article 8, sole paragraph, clause V, of this Normative Resolution foresees that the collection of FGTS and CS (Social Contribution) under the paid or payable remuneration to employees, in percentages established by the law be collected based on the remuneration paid to the foreign employee, working in Brazil, regardless where the payment of the salary is done.

Therefore, it is converted into a rule the understanding that the portion received by the foreign employee abroad is also subject to collection of FGTS.

Labor inspectors are doing due diligence at the companies to ensure they are following this Normative Resolution.

This Normative Resolution issued by Presidency, regulates the enforceability of the contribution, however, we recommend our clients to consult their tax lawyer about the legality and applicability of this Normative Resolution.