The Federal Revenue points out that an individual who enters Brazil is considered a resident for income tax purposes, among others:

• With a permanent visa, on the date of arrival;

• With a temporary visa, who completes 184 days, consecutive or not, of stay in Brazil, within a period of up to 12 months;

• That is temporarily absent from Brazil, or permanently withdraws from the national territory without presenting the Definitive Country Exit Communication, during the first 12 consecutive months of absence.

According to the Federal Revenue, one is considered non-resident, for purposes of taxation by income tax:

• Who does not reside in Brazil on a permanent basis and does not fit the definition provided for by the concept of resident;

• Permanently withdraw from national territory, on the date of departure, with the delivery of the Definitive Country Exit Declaration or the Definitive Country Exit Communication;

• Who enters Brazil with a temporary visa, and:

a) stays up to 183 days, consecutive or not, in a period of up to 12 months or,

b) stays until the day before obtaining a permanent visa or employment relationship, if it occurs before completing 184 days, consecutive or not, of stay in Brazil, within a period of up to 12 months;

c) who is absent from Brazil on a temporary basis, starting from the day following the day on which they complete 12 consecutive months of absence.

Yes. One who permanently leaves the country, even if they have been out of the country for more than 12 consecutive months, must present the Definitive Exit Statement so that their registration is changed to the status of non-resident for tax purposes in Brazil.

Yes. If you have been permanently absent from the country for more than 5 years, there are two ways to formalise your Definitive Exit from Brazil.

Make the Retroactive Definitive Exit Declaration, using the maximum retroaction date allowed by the Federal Revenue Service or a specific date to be determined;

Request change of registration data at the Federal Revenue through the Brazilian Consulate in the country where you live. This procedure is done by filling out the request form that you can find HERE, selecting the option Update of CPF residing abroad.

However, there are exceptions. For example, for situations in which the person kept delivering the Adjustment Statement normally after leaving. In this case, the date of the Definitive Exit Declaration cannot be earlier than the declarations presented.

Our team can assist with both services in a personalised way, guiding the best regularisation option in each specific case, accompanying the process from start to finish.

Yes. The fine for submitting a Retroactive Exit Declaration is a minimum of BRL 165.74 and a maximum of 20% of the amount of tax calculated as due.

The Retroactive Exit Declaration is when we prepare a Final Exit Statement dated before the calendar year of the current fiscal year.

The Definitive Exit Communication is an obligation to the Declaration, which consists of informing the date on which the taxpayer left the country permanently.

Sending the Definitive Exit Communication does not exclude the obligation to deliver the Definitive Exit Declaration.

Following Normative Instruction No. 208 of 2002, Article 2, Item IV, the Brazilian who returns to Brazil permanently becomes a tax resident in the country on the date of their arrival.

It is necessary, however, that you make an Annual Adjustment Declaration referring to the calendar year in which you returned to be a resident.

For example, if you return to reside in Brazil on 10/15/2022, you must, as a rule, present the Annual Adjustment Declaration between March and April 2023, so that the registration is changed in the Federal Revenue database.

It is always worth checking the deadline and documents with a specialised professional, to ensure that you are sending the information within the correct deadline.

After sending the Definitive Exit Declaration, it is recommended that the person close their resident bank accounts, and start having a non-resident bank account in Brazil.

Maintaining an active account in Brazil after making the Definitive Exit Declaration can lead to pending issues with the Federal Revenue, as banks and investment brokers periodically send statements of balances and movements that have occurred.

In this BLOG POST on better bank accounts for those who live abroad, we explore this topic.

It is important to define with a specialist, according to each case, the best way to deal with investments, as well as dates and deadlines for closure.

Our CONSULTATION addresses this issue in various dimensions and in a practical way for each case and reality of heritage.

Yes, it is common to maintain, acquire or sell real estate in Brazil even after the Definitive Exit.

An important point to be noted is the need for an attorney to manage the documents, signature and collection of fees on behalf of the non-resident person.

In order to contribute to the INSS after the Definitive Exit, the taxpayer must opt for the optional collection rates, 11% or 20%, following the current INSS contribution table.

There is an exception for taxpayers residing in countries where Brazil maintains a social security agreement. In such cases, the guidelines contained in the document available on the Federal Revenue website must be followed.

In countries with social security agreements, it is worth observing each specific case, especially if one already contributes in the country where they live in.

We have a BLOG POST where we explain how Social Security works in Brazil and the impacts after the Definitive Exit Declaration, and ways to request or maintain your contribution even when residing abroad.

Our team of lawyers and accountants, in Brazil and the United Kingdom, is available to assist with retirement planning and requests.

It depends. After becoming a non-resident, some tax rules are applied differently and as a result, there is a possibility that you may pay more taxes on Brazilian income.

For example, if you have income whose origin is Brazilian, either from the sale of real estate verifying the capital gain in Brazil or if you rent the property you own, it is necessary to pay the relevant tax.

While for residents in Brazil, the income tax rates to be considered are in accordance with the current table, that is, they start at 7.5% and can reach 27.5%, considering deductions. For non-resident taxpayers in Brazil, the rates are around 15% to 25%, with relevant exceptions for deductions.

Remembering that Brazilians who maintain their tax residency in Brazil (did not make the Definitive Exit) and started to have income and assets abroad would need to declare them to the Federal Revenue Service. Depending on the amounts involved and the country of that income, they would need to pay taxes in Brazil on the income abroad.

Thus, regarding the financial aspect, when making the Definitive Exit, the tax can be higher or lower.

For this reason, tax planning and scenario simulation are always recommended, which we carry out with each client. Many clients come to us before leaving Brazil in order to plan the most appropriate way.

If you want to simulate your case, schedule a CONSULTATION.

Yes. Non-residents can normally continue to receive rent for their property in Brazil, provided they observe whether the paying source is collecting and withholding the Income Tax on Rent for Non-Residents.

According to the Federal Revenue Service, in the Withholding Income Tax Manual, page 199 – Code 9,478, the obligation to pay the income tax on rent received by the non-resident is the paying source or the attorney-in-fact, based on the calculation the amount received and the rate of 15%. In cases where the beneficiary is resident or domiciled in a country with favoured taxation, the income will be subject to income tax at source at a rate of 25%.

It is important to point out that when making the Definitive Departure Declaration, the taxpayer is automatically exempt from presenting the Annual Income Tax Adjustment Declaration for the coming years until they return definitively to Brazil.

When qualifying as a non-resident in Brazil, the fact of having or not owning real estate in the country does not characterise the obligation of an Income Tax Adjustment Declaration.

On the contrary, when transmitting an Income Tax Adjustment Declaration in the year following the Final Exit, the Federal Revenue will understand that you have returned to being a tax resident.

If you have submitted an Income Tax Return after making the Exit Declaration, contact us HERE and understand how to regularise it.

No. The Definitive Exit Declaration is submitted only once, when the taxpayer leaves the country permanently. After this submission, you will only deliver the Annual Income Tax Adjustment Declaration when you become a resident in Brazil again.

By informing an attorney in the Definitive Exit Declaration, with the objective of appointing a person so that he can represent you before the acts of the Federal Revenue Service, as well as collecting fees and documents on your behalf, thus also being a Brazilian address for any correspondence that the Federal Revenue needs to issue.

The appointed attorney will not necessarily have access to all the services of the Federal Revenue automatically, as it is necessary to request the preparation of a document which gives the attorney specific powers for this type of representation.

According to Article 5 of Normative Instruction nº 208/2002, “as of the 1st December 2002, registration in the Individual Taxpayer Registry (CPF) is mandatory for non-residents who possess goods and rights subject to public registration in Brazil, including:

I - Real Estate;

II - Vehicles;

III - Vessels;

IV - Aircraft;

V - Shareholdings;

VI - Bank current accounts;

VII - Investments in the financial market;

VIII - Investments in the capital market.”

The pensioner who does the Definitive Exit Declaration continues to receive their pension normally.

The main implication is the withholding of Income Tax which will now be 25% and no longer according to the Income Tax table.

It is important to say that even those who qualify as exempt, when making the Definitive Exit of the country, are also subject to taxation, according to Article 746 of the Income Tax Regulation – RIR/2018, approved by Decree No. 9,580 of 2018.

In practice, we are faced with several cases in which the INSS does not deduct the percentage due, even after being informed, leaving many taxpayers worried.

According to instructions from the Federal Revenue Service for Income Tax, “in the event of claiming the tax refund by means of the declaration, the bank, agency and number of the current or savings account held by you in which you intend to make the payment must be indicated or, alternatively, inform the PIX key of the holder of the statement.

The declarant who is outside Brazil must indicate the bank account they own, at any bank in Brazil authorised by the RFB to make the refund (including the option to inform the PIX key of the holder of the declaration). If the taxpayer does not have a bank account in Brazil, he must appoint an attorney in Brazil to receive his refund.

Yes. The person who made the Definitive Exit Declaration can enter and leave Brazil normally.

Upon returning to Brazil permanently, one must go back to doing their annual Income Tax Return.

In this BLOG POST on Definitive Exit Declaration, we point out the criteria and date count for the characterisation of resident and non-resident in Brazil.

Yes. A non-resident person can open or maintain a company in Brazil as long as it meets certain requirements such as:

1. The company cannot opt for Simples Nacional, since Law No. 123/2006 says that for that to happen, it is necessary for the company's representative to be a resident in Brazil;

2. It is necessary to indicate an attorney so that he is responsible for the direct management of the company when it is a limited liability company of one or more persons;

3. If the capital paid up in the company has a source abroad, it is necessary that the company, and the non-resident partner, have specific registrations with the Central Bank of Brazil, for this investment to be carried out.

In this BLOG POST we explain in detail the impacts of having a company after the Definitive Exit Declaration, and what are the best options for those who want to open a company living abroad.

If you have further questions regarding the topic, you can SCHEDULE A CONSULTATION and we can analyse your case.

In accordance with the Income Tax Regulations, when calculating capital gains for non-residents in Brazil, the tax exemptions and reductions provided for residents in Brazil do not apply.

When calculating the tax, you can use brokerage costs as a deduction in the calculation basis for capital gain on property, provided that this cost has been paid by the non-resident themself.

Still, according to the Federal Revenue document, the paying source of the asset, whether an individual or legal entity resident in Brazil, is the one who must withhold and collect the income tax levied on the capital gain.

The code to be used in preparing the DARF is:

0473 - Capital gain earned by an individual or legal entity resident or domiciled abroad that disposes of assets located in Brazil, or the acquirer's attorney when the latter is also resident abroad.

The information above is based on Law nº 10.833 of 2003, Article 26; and Income Tax Regulation - RIR/2018, Article 153, Paragraph 1, Item III, approved by Decree No. 9,580 of 2018.

If you have doubts about applying this guideline to your specific case, we are available to offer the best solution through a CONSULTATION.

According to the Income Tax Regulation - RIR/2018, Article 35, Item VII, Line “c”, Article 128, Paragraph 4, Article 680 and Article 741, the Income Tax (IRRF) is levied on the payment made to an heir not resident in Brazil for the acquisition of the right to the portion of the property that falls to him as a result of inheritance. The Income Tax rate to be withheld is 15% or 25% for residents in countries with favorable taxation.

It is important to say that this case has been questioned a lot, since inheritances and donations are already taxed at the state level with the Tax on Inheritance, Donations and/or Cause of Death (ITCMD or ITD depending on the state).

Thus, some legal interpretations bring up the discussion that there would be an inconsistency of treatment when offering this type of income to Income Tax taxation, which is a Federal and not a State competence.

A CONSULTATION with accountants Fernanda Ellis or Mariana Oliveira is recommended to discuss each specific case and to define the best solutions in a practical way.

If necessary, our team of lawyers also assists with possible legal challenges.

Yes, as long as the other person does not declare you as a dependent in the year in question.

For example, if you have been listed as a dependent in someone's declaration referring to the calendar year 2022, you can make the Definitive Exit Declaration only in the next calendar year (2023) as the holder of the declaration.

Therefore, it is always important to assess the real need and benefit of including dependents, as it is not always advantageous or necessary. In some situations we recommend rectifying the previous statement.

If you are in doubt as to whether you are listed as a dependent or whether you should declare a dependent on your Income Tax Adjustment Statement or Definitive Exit Statement, CONTACT US.

It's not possible. One of the main criteria for opting for the type of MEI company is to be a resident in Brazil.

Therefore, if you wish to send an Exit Declaration, you must first close the CNPJ MEI and then send the Definitive Exit Declaration.

In this ARTICLE we talk about the types of company and how to maintain a CNPJ after the Definitive Exit in Brazil.