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Brazilians leaving Brazil – Questions and answers about tax obligations
In the recent years, the number of Brazilians who have left the country has been greatly increasing. In addition to the preparation of change of a residence country, Brazilians living abroad (also known as expatriates) must verify their departure and stay conditions in the new tax residence to know whether they must report the 2018 Individual’s Income Tax Return (IRPF) and avoid problems with the Treasury.
In order to clarify some points on the subject, DPC prepared a summary with the following main doubts:
1. How is characterized the non-resident in Brazil?
Non-resident in Brazil is a person who:
i. do not permanently reside in Brazil and is not under the hypotheses provided for resident in Brazil;
ii. has permanently moved from the national territory, on the departure date, with the presentation of the Communication of Final Departure from Brazil;
iii. as a non-resident, enters Brazil to provide services as an employee of a foreign government body located in the country, provided that this employee has not definitely returned;
iv. enters Brazil with a temporary visa:
a) and remain for up to 183 days, consecutive or not, within a period of up to twelve months;
b) until the day prior the obtaining a permanent visa or employment relationship, if is prior completing 184 days, consecutive or not, of permanence in Brazil, within a up to twelve months’ period;
v. has been temporarily absent from Brazil, from the day following that in which you complete twelve consecutive months of absence.
2. What exempts a taxpayer residing abroad from reporting the 2018 Individual’s Income Tax Statement (DIRPF) to the Federal Revenue of Brazil?
The presentation of the Final Departure Communication and the Statement of Final Departure from Brazil exempt from the obligation to file DIRPF.
3. What is the difference between the Final Departure Communication and the Statement of Final Departure from Brazil?
Both documents are mandatory for those who exit Brazil. however, they are separate information for the Federal Revenue. The Final Departure Communication (CSD) must be filed by those who (i) definitively exits Brazil and (ii) become a nonresident in Brazil, when temporarily exiting the national territory.
If the exit is permanent, the CSD must be filed from the departure date until the last day of February in the calendar year following the departure. In turn, in cases of temporary exit, the CSD will be mandatory from the date of non-resident condition characterization until the last day of February of the calendar year following the departure.
In turn, the Statement of Final Departure from Brazil (DSDP) is the last DIRPF, in the option "Declaração de Saída" (Declaration of Exit, in English), which characterizes the taxpayer as non-resident.
Those taxpayers required must file the Statement of Final Departure from Brazil from the first working day of March until the last working day of April of the calendar year following the departure, if this occurred on a permanent basis, or from the characterization date of the non-resident condition, if the departure were on a temporary basis.
4. Is there any penalty for late filing of Statement of Final Departure from Brazil?The filing the DSDP after the deadline subject the taxpayer to the following penalty for:
a) existence of a tax due: one percent (1%) for penalty per month or fraction of delay calculated on the amount of tax due, considering the minimum value of BRL 165.74 and up to twenty percent (20%) of tax owed;
b) no tax due: BRL 165.74 for penalty.
5. What is the kind of treatment for who is abroad working for the Brazilian Government's agency?
The individual under Brazil’s service in a Brazilian Government offices located abroad maintains the status of resident in Brazil and is subject to file the DIRPF in accordance with the same rules applicable to other individuals resident in Brazil, observing the benefit of reducing the income to 25%.
It is noteworthy that the employee of a public or a joint-stock company, when at a specific service of the company abroad, as well as the local contracted of diplomatic representations, is not framed in the absentee abroad concept in the Brazil’s service.
6. Who has left the country should provide any information in addition to the communication to the Federal Revenue?
Individuals are required to inform possible payers in Brazil about their non-tax residents status (for example, banks, employers, tenants, private pension entities, etc.) so that future payments on behalf of themselves (after the characterization date of non-tax residence) are taxed at the rate and tax payment code applicable to the case.
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