How do I declare that I have left the country for good?

How do I declare that I have left the country for good?

The Final Exit Declaration (DSD) is a declaration of income tax special, very similar to the annual adjustment declaration (the "normal" declaration). But there are some small differences between the two.

How to make the declaration of definitive departure from the country: Main differences from the DSD

The DSD has an additional form called "Output", on which the data relating to that output is entered. On this form, the fields that the system asks you to fill in are:

• the appointment of a proxy, a natural person, to receive communications from the Revenue such as letters and other notices about the situation of those who are leaving. Appointing a proxy is optional. The form must include the CPF, full name and address of the chosen proxy;
• date of non-resident characterization: i.e. the date of tax exit;
• date of characterization of resident status in the country: this field is usually left blank and applies to the situation of someone who, in the same year, became a tax resident in Brazil and then left (for example, a foreigner with a work visa who stayed in Brazil for a project lasting a few months). This field fills in the date of the person's tax entry into Brazil. When the tax entry took place in a year prior to the tax exit, the fact is not reported on this form.

Note that the name of the attorney-in-fact and the date of the tax exit are the same pieces of information requested when transmitting the Communication of Final Departure from the Country (CSDP). If the CSDP has been transmitted, then to find out how to make the definitive exit declaration you just need to repeat the same information.

The way in which the DSD's assets and rights form is filled in is also different.

If, for example, the person was a tax resident in Brazil at the beginning of the year and ceased to be a resident on a specific date before the end of the year, the assets and rights form will contain two fields: (i) the situation on December 31 of the previous year; and (ii) the situation on the date of the characterization of the non-resident status, i.e. the tax exit date. The situation on December 31st of the calendar year does not matter, as the taxpayer was already a non-resident.

The assets and rights sheet is filled in according to the specific situation of the asset. Suppose the declarant had a property, made the tax withdrawal and then, but still within the same year, completed the sale of that property to a third party. In this case, the property still belonged to the estate on the date of the tax withdrawal, and so the acquisition cost of the asset must be maintained.

About the debt file

As with the assets and rights sheet, the debts and encumbrances sheet must also show the position of a debt on the date of the tax exit, and not on December 31 of the DSD calendar year. A debt settled after the tax exit should not be written off, as the settlement took place after the start of the non-resident status.

So the thing to bear in mind when filling in the DSD is the change in timing. The period begins on January 1 or the date of tax entry (whichever is later), and ends on the date of tax exit. The declaration period will only end on December 31 if that is the date of the tax exit. What happens to the declarant's assets or income before the tax entry (if it occurs after January 1) or after the tax exit should not be reported in the declaration.

There are also two differences between the DSD and the annual tax return:

• (i) There is no option in the DSD for the simplified deduction, only for the legal deductions;
• (ii) If the DSD results in the collection of complementary tax, this must be paid in a single installment, by the end of the submission deadline. It is not possible to pay the complementary tax in installments.

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This text about How to make a permanent exit declaration was prepared by Vinícius Tersi Advocacia, a law firm specializing in International Tax Consulting.