Normative Instruction SRF no. 208/2002, in a specific device, informs that, if the person did not formally leave definitively when he/she left the country, he/she will have his/her tax residency in Brazil extended for another 12 months after having physically left Brazilian territory. This situation is called by the legislation “temporary exit”. Thereafter, the person must be treated as a non-resident.
Despite the normative provision, the recognition of the temporary exit is not automatic. The IRS still asks the taxpayer to deliver a definitive exit statement to inform that he ceased to be a tax resident after the period of absence had passed. In other words, in practice, the only difference in terms of compliance with tax obligations between the definitive exit and the temporary exit is the setting of the tax exit date.
This creates a problem in a very common situation: the person who returns to Brazil annually, before completing 12 months, to spend a few days in Brazil to visit family, to do tourism and to spend the end of year festivities. The Individual Income Tax Return Program Help states that if the taxpayer has not completed 12 uninterrupted months of absence, the 12-month period of temporary withdrawal must be restarted. Interpreting this orientation literally means that, just for a few days, the person will never stop being a tax resident in Brazil.
This understanding is incoherent, since it disregards that the element that characterizes the Brazilian’s non-residence is the intention to remain in Brazil, a subjective criterion. If the person has already met this subjective criterion, there are already facts and circumstances in his life that prove his lack of interest in staying in Brazil. This element alone should already be sufficient, even if the formalization of the final exit did not exist.
It is worth noting that the Federal Revenue Service, on one occasion, already presented in this Consultation Solution exactly this understanding, supported by Normative Opinion. It was defined that “it does not characterize a return to vacation travel or other reasons, as it does not have a stable character of permanence in the national territory”.
Thus, although the most conservative is to apply the law literally, it is possible to defend the temporary departure after 12 months, without the time spent only for holidays and tourism restarting that period.
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