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3 dilemmas that get in the way of those who want to declare their permanent departure from the country and keep financial investments in Brazil
[See the full article at Financial investments in Brazil: The non-resident's dilemma]
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I lived in the USA for 4 years (2015 to 2019), left permanently and kept all my investments in Brazil (shares, direct treasury, CDI, rental properties). I collected the taxes myself (without a legal representative), paying the tax returns with a non-resident code. I declared everything to the US tax authorities and deducted the amount of tax paid in Brazil from what I owed there.
I tried to communicate my permanent departure to my bank and brokerage firm in Brazil, but I didn't even get a reply. I left my bank and brokerage accounts as if I were a resident (a famous consultant who helped us through the process said that it probably wouldn't be a problem).
I've always paid the taxes due according to the legislation of each country, and I've never had a problem.
I moved back to Brazil in 2019 and started filing my tax return here again. Since then, I've never had a problem with the IRS either. And my tax return is a mess, with dozens of different sources of income.
My impression is that nobody controls anything about non-residents, and there is no such thing as psedo communication between governments. As long as you rigorously pay the taxes due in each place, no one will worry about you. -
Excellent explanation, thank you.
But the current rates charged by banks make it unviable for small non-resident investors to continue investing.
Since the amounts for.ma'utencao account 4373 start at R$ 2,000.00 per month, Cde starts charging at R$ 1,000.00, making the small investor's plan completely unfeasible.I believe that with the advent of technology, the Rfb together with the Bacen could create a statement for investors to inform them of their remittances and withdrawals, thus reducing the cost for investors.
Thanks and big hugs
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Congratulations on the articles on the site, they are very enlightening!
I've read in a few places (e.g: https://www.mazainvest.com.br/os-desafios-do-investidor-nao-residente) that the CDE would be a necessary account for non-residents who want to send money to Brazil to invest. If the person already has investments in Brazil from when they were a resident, but doesn't transfer new money for contributions or withdrawals, the account at the stock broker or bank could be kept. Is this true?
For example, before leaving Brazil, a person had an account with a stockbroker, with investments in shares, FIIs, CDBs and Treasury Direct. After leaving the country, no money was put into the account, apart from receiving income from the investments, or the sale price of an asset. No withdrawals were made. More assets were acquired, but only using the amounts received from income and sales.
Could there be a problem with the IRS in this case, since the income from these investments falls into the account with the IRPF already withheld at source, and there have been no deposits or withdrawals apart from these receipts?
Thank you in advance for your attention
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Very good article! CVM Resolution 64/2022 came out a while ago. Has this made investing easier for non-residents?
In my case, I live abroad, I left permanently 5 years ago, but I still have investments in banks, without any problem (for now). I intend to regularize it and it seems to me that this Resolution will make it easier.Thank you!
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Good afternoon, thank you for your clarification.
It's one of the few places where quality information is available.
One question: some brokers state on their website that after tax withdrawal it is only possible to keep the investments and/or redeem them.
Is this legal? Because the information is contradictory... -
Weren't the changes in CVM 64 of 2022 a step in the right direction? Before it, the "ex-Brazilian" seemed obliged to redeem everything and leave the country with their funds, or open the very limited (and very expensive) CDE account. Now it seems to have improved a lot. I understand that it needs to be digested and there needs to be more competition between banks and brokers, but it was a surprisingly better piece of legislation than the current situation. My broker (XP) told me that I could keep my investments here as if I were Brazilian (funds, stock exchange, pension plans and private bonds).
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Hello Dr. Vinicius!
I fully agree that the legislation needs to be improved. It should be in the country's interest for Brazilian citizens to keep investments in Brazil when they move abroad. Some special control for foreigners' accounts in the country could even make sense, as long as it doesn't make it impossible to attract funds from abroad.
Congratulations on this relevant and high-quality text! -
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Now, also as I understand it, it depends a lot on whether the broker or bank through which we invest accepts keeping our investments as non-residents or not, right? And also, it seems that the biggest problem is making new investments with funds from abroad, because the investments we already have, in shares and funds, for example, these could be kept without any problems, right?
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Hello, Maria Helena!
Thank you for your interest in our content. You could say that for those who left the country in 1998 it would be the same as under the current rule. IN SRF 208/2002 regulates much older laws. The main law dealing with permanent departure is Law 3.470/1958 (http://www.planalto.gov.br/ccivil_03/LEIS/L3470.htm#art17). The previous Normative Instruction, IN SRF 73/1998 (http://normas.receita.fazenda.gov.br/sijut2consulta/link.action?idAto=14244&visao=anotado) said more or less the same thing as the 2002 Normative Instruction.
I hope I've been able to answer your question. If you need our support, just contact our team via WhatsApp or email!
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Maria Helena,
one more thing: by total coincidence, we've just published a new post about a case that seems to be the same as yours, of someone who left the country in 1998: https://tersi.adv.br/nao-fiz-declaracao-de-saida-definitiva-do-brasil/
Happy reading! If you need to contact us, just send an e-mail to contato@tersi.adv.br or WhatsApp!
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I live in the US and I left Brazil in January 2014 and filed my exit tax return in 2015, but I didn't file the exit tax return because I didn't know the process. In 2020, with stocks at an all-time low due to the onset of Covid, I sent money to Brazil and invested it all in stocks. I want to get rid of everything now because I no longer see any point in keeping them.
Do I have to declare income tax or not?
I haven't sold any shares, but there are dividends and interest on own capital that I didn't declare in 2021 (ref. 2020) and I have until May 31 to declare 2022 (ref. 2021).
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Hello, Vinicius,
Great text, thanks for sharing your knowledge.
I've lived in London for 11 years, with a few periods when I lived in Brazil for a few months, and I'm returning to Brazil for good. Due to lack of knowledge, I'm pretty sure I haven't declared tax residency here. I also haven't declared income tax because I don't have any income in Brazil. Do you know if I can invest in shares in Brazil, or if I might have any problems? Could you help me with this? Thank you in advance,
Débora Guedes
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Hello Mr. Vinícius.
The content of your site is excellent! I found here several answers to questions that no one in my city in Brazil could give. I would like your guidance on the following question:
I made the Final Exit Declaration in 2017. At the time, when I looked up whether my bank had a CDE (Domiciled Abroad Account), I discovered that they didn't offer this option. As I didn't know how long I would be abroad, I opted to keep the account open and didn't formally inform the bank of my non-resident status. I never declared anything again in Brazil.
In the US, I've declared every year since 2017:
i) the current account that remained in Brazil; ii) the existing LCAs and the income obtained.
Now I want to formalize my non-resident status with the bank, close the account in Brazil and bring the money to the USA.Questions:
1) In Brazil, income from LCAs is exempt from income tax. Even so, should I have declared them through the DIRF because I'm a non-resident?
2) How does the transfer of money from Brazil to the USA look to the IRS? How do I declare it?Thank you very much.
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Good morning dr! Congratulations on the site!
I did my last Income Tax Return in 2015 (exempt), and in 2016 my accountant did my DSPS. As I didn't know about the need to inform the bank of my withdrawal, I continued with my account and even renewed my credit card during this time (during this time I also renewed my driver's license and every year I cross the border to justify my vote in the elections). In addition, I used to have a private pension plan, where I made a withdrawal this year of the total amount invested (Brasilprev), where tax has already been withheld at source. In this case, can I keep my CPF pending regularization or not?
I live in Paraguay, where Brazil has an agreement signed, but not in force, to avoid double taxation. And if I invest again in Brazil (fixed income, variable income, FII, FIAGRO, stock exchange), even if I live abroad, I have to declare it again in Brazil, right? So, should I still report my assets and income abroad (monthly or annually?) and pay tax both in Paraguay (where I already pay) and in Brazil? Thank you very much! -
Excellent text! Very complete!
If the person doesn't file the final tax return, but continues to file the annual tax returns correctly, there is no penalty, right? Or if there is, you have to pay the 167.00 fine once. Is that it?And if the person brings part of the money earned abroad to invest here, is it taxed again in Brazil? Thank you.
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Vinícius, thank you very much for sharing this information.
As a wise man once said: "It's like it was designed not to work".
But I would ask you another question:
And a non-resident beneficiary of a VGBL plan.
How would it be resolved?
The insurance company wouldn't send an exchange of its corresponding share, would it?
An attorney-in-fact could even be paid here in Brazil, and could remit this exchange as Resident Maintenance, right? But would you be exposed to any future tax problems?
I don't think so because the VGBL is exempt, but it has to be declared and this proxy would just be a bridge.
I'm sorry for asking too many questions -
I came back from abroad last year after 4 years away, I did the Non-Resident Declaration and before I went I talked to my managers, nobody asked me to close the account, they just asked me to move it (savings account) from time to time so that it wouldn't close, and the next time, the same. I went back, did my tax return and had no problems...
My problem comes now, because I'm going to spend another period abroad and now I have investments in brokerage houses... I'm not going to move anything from there or send any money here, I just didn't want to get rid of them but according to the "rule", I'm going to have to get rid of everything...😕 -
Hi Vinicius, thanks so much for sharing these details!
Since it's so difficult for us to keep our inventories and bank accounts in Brazil after we leave, I think the solution would be to take our valuables abroad. In this case, it is necessary to declare the remittances abroad, right? Is there an amount limit?
Thank you so much! -
I came to the US in 2014 and didn't file a declaration of permanent departure from Brazil. I still keep my bank accounts and now I'd like to invest and I'm realizing that it's impossible for small investors. If I haven't made this declaration, could I have any problems in the future? Remember that I don't declare tax in Brazil.
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I'm going to Spain now and I have an investment in my brokerage that can only be withdrawn next year, I'm going to transfer all the money there and then make the exit declaration, but what about the money I haven't been able to withdraw? Will they close the account and how do I get it? If it stays open, it'll show that I'm a resident.
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Sensational content published regarding the life of the tax resident and investments in Brazil!!!
What should I do with investments that have already been invested and cannot be withdrawn? Like long-term CDBs...
I'm saying this because I have to make the tax withdrawal next year, can I keep it or should I follow another procedure with the broker?
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Hello, Dr. Vinícius,
Excellent article! I'm looking for information about this because I find myself in a somewhat unusual situation: I left the bank permanently in 2015, but I had a joint account with my wife and a couple of assets in the Itaú brokerage that I hadn't regularized. Last year I removed my name from the account and ended the relationship with the bank, but I forgot about the assets in the brokerage. Now the broker won't let me access it, since I'm no longer an account holder, and won't let me open account 4373 to redeem the assets and close it again, this time permanently. The solution presented is to transfer everything to a broker that works with non-residents, but I don't know of any except BTG, which charges a lot for the account (every six months) as you commented in the article.
Have you ever encountered a similar situation? Are there any alternatives, such as donating these assets to my wife? Or is the solution proposed by Itaú really the only viable one?
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Hello Vinicius, good afternoon!
Congratulations on your post, very well written and very instructive.
It's amazing how Brazil's governance is always playing against the country's interests.
I've lived abroad for many years but I've been resident in Brazil for three years - I wanted to domicile my income from abroad in my Brazilian account. The bureaucratic process was so complicated that I had to give up!
The generalized "mistrust" that prevails in Brazil has an astronomical cost and only the white-collar gangs take advantage of this wear and tear. -
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Congratulations on the material Dr. Vinícius!
I'd like to know what you think about the taxation of VGBLs for non-residents.
Some insurance companies withhold tax on the whole amount (similar to the PGBL) at a single rate of 15%, while others keep the same rate, but only on income, which in my opinion would be the most beneficial for the PF investor, who would make any adjustments in their country of residence, encouraging them to keep the funds here in Brazil. -
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