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One topic often comes up in the work we do for our clients: what should those who (...)
[See the full article at Living in Brazil and in another Country: Dual Tax Residency, Brazilian Agreements and Reciprocity]
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Congratulations on a very enlightening publication.
One question: As far as I know, Brazilians who don't report a tax exit but who stay outside Brazilian territory for more than 365 days lose their Brazilian tax residency. How does this happen in practice? I'd be grateful if you could shed some light on this... -
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Great clarifications! But unfortunately my main doubt remains. See if you can help me, please! A person who has been living in Italy for more than 2 years but has a source of income only in Brazil through pro labore, as she also owns a company there. She continues to file her DIRPF in Brazil as normal and does not yet declare it in Italy. Can this person be considered to have dual tax residency? Or would she have to make the final exit declaration anyway?
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In this case, in the Brazilian income tax return said
salary will need to be reported as exempt income earned in the
outside (rule of the Agreement)...Can you tell me exactly where, in the Receita Federal IRPF 2020 program, is the place to put exempt income earned abroad? I can only trick the tax office by lying in the "Tax Paid Abroad to be Offset" field, but that's not the case, because in my situation the foreign country has an agreement, and the tax is due only there for the tiebreaker criterion.
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I've been living in England for 15 years, I've never filed a tax return, but I still have accounts with Itau in Brazil. In England, I have had an amount deposited in my bank account, which is over 100,000 pounds, for about 2 years now.
Question: Should I declare this to the CDE? What are the problems with not declaring the money in my account? -
Good afternoon, excellent article. One question: when the income is taxed exclusively by the other treaty country, how can we report these amounts in the DIRPF in order to justify an increase in assets (e.g. for the purchase of shares or investment in a financial investment)?
I don't think there is a specific field under exempt and non-taxable income (in the "other" field, you can only follow if the paying source has a CNPJ, so if the paying source is in another country, it's not possible). I also don't think it's the right way to add in "income from abroad" because this amount would be computed for IRPF purposes.
Any light? -
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Hello, Pedro!
Thank you very much for your interest in our content. It's very difficult to offer a recommendation in a blog post without analyzing information or documents. I can say, more generally, that the first point is to know if your current situation is regular, i.e. if you left Brazil without formalizing your definitive departure and any other declarations, or if you continued to submit declarations without informing the foreign party (which is wrong). It would be preferable, whenever possible, to correct the situation in the past, so that your UK income can be recognized as non-taxable in Brazil.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Hello, Donizeti!
Thank you for your interest. The law doesn't prevent those who have made a tax exit from keeping bank accounts and fixed-income investments in Brazil, but the regulations do create some obstacles that shouldn't exist. Basically, the non-resident should just send a letter to the bank and brokerage firm informing them of the change in tax status, so that income tax can be withheld correctly. As a general rule, this tax for financial income is the same as that for residents, just levied under a different code.
Unfortunately, the Central Bank's regulations have not kept pace with these rules. Today, there are difficulties in maintaining fixed-income financial investments (other than savings accounts and the bank's own CDBs) and bank accounts. The explanation here would be too long, but I'll detail the situation here in this text.
I hope that these changes will be resolved next year, when the New Foreign Exchange Law comes into force. We are waiting for the regulations to be prepared by the Central Bank to be sure.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Hello, Anira!
Thank you for your interest in our work. It is true that only the "Other" field can receive information on non-taxable income that has not been included in the other items, such as items that are not taxable under double taxation agreements.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Hello, Sergio!
Thank you for your interest. In triangular cases such as yours, the type of answer can be quite complex, as it requires attention to various details of your situation in order to give a reliable answer. Assuming that the tie-breaker for dual residence in the Brazil-Portugal agreement is in favor of Brazil, the capital gain would be taxable in Brazil, and any tax paid in the US and Portugal could be used as a credit. If the same tie-breaker went in Portugal's favor, the answer would be completely different. It really is a situation that goes beyond what can be covered in a post.
But I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Hello, Sonia!
Thank you for your interest in our content. If you remain resident in Brazil and live in Germany, Sonia, you are obliged to declare your assets and income earned abroad. It's worth remembering that German income tax (both Lohnsteuer and Soli) can be offset against Brazilian tax, because of the reciprocal treatment we have with Germany. Regarding other payroll deductions, such as social security contributions, the IRS does not offer a clear rule on the possibility of deducting them from taxable income.
For those who are not tax residents in Brazil (i.e. have left permanently), there is no tax to pay in Brazil on income from work in Germany.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Good afternoon.
I moved to England 10 months ago to study and was hired to work here. I have investments in Brazil and, as I know there is a reciprocity treaty between Brazil and England, I would like to remain tax resident in Brazil (reporting all income earned here abroad and offsetting the taxes paid here). I have 2 questions: 1 - after 12 months abroad, can I continue to be a tax resident in Brazil as long as I continue to declare my income tax every year (reporting everything I receive from abroad) or, after 12 months, am I obliged to make a Final Declaration of Exit? 2 - what taxes can be deducted in Brazil? In this case, here I will pay Income Tax and National Insurance on my salary.
Thank you very much and congratulations on the post.
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Hello, Otávio!
Thank you for your interest in our content. Regarding maintaining dual tax residency after 12 months of absence from the country, I have argued that it is possible, as long as there is proof of the existence of the definitive intention (for example, by submitting the "normal" income tax return, complying with all Brazilian rules). I don't have a specific text on the subject today, but I do touch on it in this text on the definitive mood.
What can be offset against income tax in Brazil must always be the equivalent of income tax. Social security contributions are not income tax, and therefore cannot be offset. It is possible to argue that they should be deductible from the salary, in order to tax the net salary, but this is not expressly provided for in the legislation (the tax rules talk about the official Brazilian social security contribution, not the foreign one).
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Hello, Valeria!
Thank you for your interest. The expression "permanent home" only exists in international agreements to avoid double taxation, and not in Brazilian domestic law. As far as I know, we've only had one Carf ruling that applied it, and it didn't do so in depth. It only said that the address informed in the income tax return is a permanent home (or, rather, that the taxpayer himself generated proof that it was his permanent home, because he declared it to the tax authorities).
I have argued that "permanent dwelling" means a property, owned or rented, used for family housing. Thus, a property owned in Brazil and rented to a third party is the permanent home of the tenant, not the owner of the property. Therefore, it depends on how you are using the property and what you are declaring, either in the "normal" declaration or when submitting the definitive exit declaration.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Hello, Alex!
From the Brazilian point of view, the requirement of the Simples Nacional legislation is that the company in Brazil is not owned by a "partner domiciled abroad". We understand that this means that the partner must remain a tax resident in Brazil, so you are correct. We know from practical experience, however, that when cross-checking CPF data with the Board of Trade, any address abroad reported on the income tax return or final exit declaration already creates difficulties.
If I were you, I would also take into account that, if you remain a tax resident in Brazil, your salary and other income from Germany will be taxable in Brazil too. And that Germany has its own rules, including on keeping companies in other countries.
We are building new content for our German Desk, which will cover German-Brazilian issues. We'll have more information soon.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Congratulations on your excellent article Dr. Vinicius! Before I read it, I had the understanding that the condition of non-tax resident in Brazil was automatic from the moment you completed 1 year of residence abroad, regardless of other ties with Brazil. I, for example, have lived in Canada for 2 years and have not returned to Brazil for 1 year and 4 months. However, I still have an employment relationship in Brazil, as I am a public servant formally authorized to work from abroad on a teleworking basis. My main source of income and only employment relationship is in Brazil. Due solely to the interpretation of the length of stay abroad, I reported my permanent departure this year and have not yet submitted the permanent departure declaration. I'm therefore unsure whether dual tax residence would apply in my case, as it is more advantageous and consistent with my situation. Can the exit report be retracted? Would it be possible to cancel the exit notification for this reason (misunderstanding about the tax residency status) or is the cancellation available on the RFB website only valid for the case in which the person returns to the status of resident in Brazil? Thank you for the clarifications already provided in the article, but if you or anyone else has anything to add about my situation, it would be very useful.
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Congratulations on the excellent clarification. It is difficult to find information on this subject. My question is about income received in Portugal from an employment contract, in the Brazilian income tax return. I've been living in Portugal for 4 years and I'm interested in maintaining double taxation, both in Brazil and here in Portugal, but I've never declared my income from Portugal on my Brazilian tax return. What do I need to do to regularize this issue and what tax will be levied on this money? Thank you very much!
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Hello, Patrícia!
Thank you for your interest in our content. If there were no agreement between Brazil and Portugal, as a rule this would be income taxable by the carnê leão (up to 27.5%). In this case, the local income tax can be offset as a credit against the Brazilian tax. The income tax return program itself does this (with the amounts already converted to reais). On how to make this conversion, I deal with the subject in this text.
The existence of the Brazil-Portugal agreement gives extra benefits in contexts of double tax residence, but it is necessary to confirm your specific situation, which would require a consultation. But I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Hello, Vinícius!
Thank you for your interest in the content. Submitting the "normal" income tax return automatically cancels what was reported in the Communication of Permanent Departure (CSD). So you can resolve this situation simply.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Excellent text.
One question
I'm moving to the Netherlands for work and I intend to keep my tax residence here in Brazil, because I own a property (which will be rented out) and investments (shares and direct treasury). But in principle I don't intend to make any more investments here while I'm away, I just want to keep the existing ones. From what I've read, once you've been away for more than 12 months, you're no longer considered a tax resident, but I'm wondering, if I come back every year on vacation for a few weeks, does that time away start again? Also, from what I understand from your article, I would need to declare income tax in both countries but, due to the non-taxation agreement, there would only be a charge in one of them. In this case, the tax would be levied in the country where the income originated, i.e. income from investments in Brazil (including rent) would be levied in Brazil and income in the Netherlands (salary) would be levied there?
Thank you very much!
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Hello, Jonas!
Thank you for contacting me. With regard to maintaining dual tax residence after 12 months' absence from the country, I have argued that it is possible, as long as proof of the existence of the definitive intention is provided (for example, by submitting the "normal" income tax return, complying with all Brazilian rules). I don't have a specific text on the subject today, but I do touch on it in this text on the definitive mood. In this case, the annual trip to Brazil could be considered as an element to show that the definitive intent continues to exist, but not necessarily. The RFB has already stated that a trip merely for vacation or tourism would not restart the 12-month period.
If you have dual tax residency, your overall income must be reported in both countries. Despite this problem, international agreements (as we have with the Netherlands) or each country's own internal law (as the Netherlands has for some immigrant workers) can alleviate the effect of paying two income taxes on the same thing by granting exemptions or credits. Knowing in more detail how this would apply to your case would have to be discussed in consultation, to be sure of the situation you will be in after moving.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Good afternoon,
Congratulations on the site, surely the most complete on the subject.
I have a question: I moved to France and I haven't lived in Brazil since January last year (01/2021). At first I was going to make the Declaration of Definitive Departure from the Country (DSDP). However, reading your site, I saw that it is impossible to keep some investments that I have in Brazil as a non-resident (shares, FIIs, treasury, etc).I'm not interested in liquidating these investments, but I don't want to be double-taxed on my salary here either. I already have a tax number in France and I'll be paying it next year for the first time here. What's the best option to avoid becoming irregular?
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Hello, Humberto!
Thank you for your interest in our content.
If you are a tax resident in Brazil, your salary will normally be taxable income. In this case, the Portuguese income tax can be offset as a credit. The income tax return program itself does this (with the amounts already converted to reais). I've covered how to do this conversion in this text.
What can be offset against income tax in Brazil must always be the equivalent of income tax. Social security contributions are not income tax, and therefore cannot be offset. It is possible to argue that they should be deductible from the salary, in order to tax the net salary, but this is not expressly provided for in the legislation (the tax rules talk about the official Brazilian social security contribution, not the foreign one).
What I mentioned above is the general rule. The Brazil-Portugal agreement contains extra benefits which, depending on the case, even allow Brazilian taxation to be waived, in which case the salary income would not be taxable in Brazil. But this is a topic that is beyond the limits of a post, and would need to be discussed in consultation, in order to analyze the specific case.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Hello Vinícius, first of all thank you for the quality content and the attention you give to your readers, I'm really impressed with your work.
I have a question that I can't find the answer to anywhere.
I'm living in Canada, but I receive alimony on my CPF in a bank account in Brazil. An accountant instructed me to stop paying alimony in 2022 and report my permanent departure. In 2023 I would declare everything in Canada.
I receive the pension in a Brazilian account and transfer part of it to an account in Brazil and the other part I convert into Canadian dollars.
I'm not sure which is the right way to declare this: whether to keep paying the tax card and maintain my dual tax residency, or whether to stop paying and declare everything here. My status here is temporary for now, but I'll be here for at least the next five years. I have income from work here in Canada, and my only link with Brazil is this pension.
I'd be grateful if you could shed some light on this.Hugs and thanks again.
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Hello, good afternoon. Very enlightening, thank you. I just had a question, do you have to declare it or is it automatic when you want to have double tax residency? My case is: I live in Portugal for more than 1 year, I work and I will do my IRS and I have a company in Brazil and I will do my IR PF in Brazil.
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Thank you very much, this post was very enlightening, I needed it when I moved to Portugal almost 2 years ago, I didn't know I could have double tax residence, in February this year I made my permanent departure and now an opportunity has come up for me to be MEI and for now it is not possible because I have to reverse the permanent departure and update my address in Brazil.
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I've lived in Spain for more than five years, and I've never made a declaration of permanent departure in Brazil because in both countries I'm below the minimum income (I have no income in Spain), although in Brazil I have a current account, rental income, self-employment, private pension and savings. In Spain, I file my husband's income tax return with him. Last year he bought an apartment and I'd like to know if I need to make any kind of report to the tax office in Brazil, since the regime is partial communion of assets. Thank you for your attention!
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Hello, Vivi!
Thank you for your interest in what we have written. The IRS advises that the couple's joint assets (such as an apartment bought after the wedding) must be reported on the income tax return of one of the members of the couple (or on his or yours) when they are both tax residents in Brazil.
It's difficult to give a recommendation in this post, as I don't know how you and your husband have been fulfilling your tax obligations (you haven't made your final exit, nor have you filed any returns; I don't know your husband's situation). I can only give you a more concrete opinion in a consultation.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Hello,
First of all thanks for the post, very enlightening!I lived in the UK for five years and am now spending some time in Brazil before moving to Spain.
I haven't declared my permanent departure, I have an account in Brazil and an amount invested in fixed income that I already had before I moved abroad...
I practically didn't transfer the income I earned in England to Brazil, there were only a few transfers of low amounts... my reserves are there and I intend to take them to Spain.In this case, what would be the best solution to avoid problems in Brazil?
Do I have to make a definitive exit declaration when I go to Spain?
Thank you
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Vinicius, good evening, how good it is to find enlightening content that we can understand. I still have a question, which I don't think has been exemplified for the purposes of understanding and if you can clarify it for me, I am already very grateful! I have 2 companies in Brazil, I provide services for a Brazilian company as a PJ, my income comes only from the Brazilian market, I pay my taxes in Brazil but I go back and forth to Ecuador since my fiancé is there and I can work from home almost all the time. I spend 2 months in Ecuador and 15/20 days here. Do I have double tax residency? This year I'm even going to start declaring my bank account (which I opened in Ecuador last year) on my tax return as I've been taking part of my financial resources there because we're buying a plot of land together. Do I have to declare this purchase in my tax return here too? Since I'm going to use financial resources that were here. Anyway, thank you for sharing your time with us.
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Hello, Ana Lúcia!
Thank you very much for your interest. As the Brazilian criterion for tax residence is quite subjective, it is entirely possible to understand that you maintain tax residence in Brazil even though you spend most of the year in Ecuador. In this case, you should declare that you have a bank account abroad, and continue with your declarations in Brazil as normal.
It is worth mentioning that Brazil and Ecuador have a double taxation agreementThis can offer additional benefits in either country.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Brazilian retired in Brazil, married to French and living in France, I have never worked in France and I always do my taxes in Brazil because I have assets and my benefit too. In France I am dependent on my husband. In the declaration there is a question asking if you are married, answer yes and then the CPF of the spouse is obligatory. So answer yes to complete the DIRF. Could this cause a future penalty with the Brazilian tax authorities?
Thank you for replying -
Hello, Gloria!
Thank you for your interest in our content. The spouse's CPF field is optional, so it's fine to leave it blank. As far as I know, there is no penalty for this. The point that the IRS does not clarify is how assets should be reported on the tax return when the couple is married with a community of property and one of the spouses is a non-resident. We analyze this type of case in detail, and it is not possible to give a good answer to this type of problem in one post.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Hello, Wellington!
Thank you for your interest. To date, we don't have a treaty between Brazil and the UK to avoid double taxation. We only have a Federal Revenue Act which recognizes reciprocal treatment between the two countries (i.e. the possibility of offsetting UK income tax in Brazil).
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Finally an explanation on the subject! Thank you so much for the text! I've been looking for this information for a long time and never found it so well explained. After reading it, I read the Brazil - Canada agreement and apparently we can (according to the agreement) declare payments received in Canada as non-taxable. Is this information correct? I'm afraid of misunderstanding the document. Thank you very much.
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Vinicius, thank you for the text, very well explained. I still have a doubt, because I see that my case seems to be a little more complex. I was transferred from Brazil to Trinidad (a country that has an agreement to avoid double taxation with Brazil) in May 2020. I gave tax leave on the date of the trip initially scheduled, but due to the pandemic, I stayed in Brazil, working remotely, waiting for confirmation of the new date of the move. Since then, I have been working abroad for 28 days and returning to Brazil, where my family is.
Every month I receive my salary in an account in Brazil (I do all the exchange transactions) and I keep my expenses in real (school, condominium, courses, etc.).
How should I proceed? I've already left permanently, I'm considered a tax resident in Trinidad, I have my tax deducted at source abroad and I transfer and spend my salary in real, because I'm still waiting for the new moving date to be determined. Do I have to file my tax return this year? If so, how should I present my salary earnings in this declaration? Thank you! -
Thanks for the excellent clarifications! My question: "Is it necessary to declare IR in Brazil for having received amounts that entered the current account, in 2021, from the sale of part of the assets of an inheritance, even though I left Brazil definitively, and have a tax residence in the USA?".
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Hello Dr. Vinícius, very good blog. I would like your opinion. I am Brazilian, I have never left Brazil permanently and I have lived in Chile for 12 years. I have an income from work and a business, a micro-enterprise, in Chile. I have no residence or domicile or income in Brazil. I am currently interested in opening a micro business in e-commerce in Brazil but things get complicated when they ask where I live or if I have a home except for an Airbnb for a couple of months.
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Hello, Sara!
Thank you for your interest in this topic. The Brazil-Canada agreement can, in some situations, exempt you from Brazilian taxation, but you need to be sure that you are in this situation. When I do consultations, I usually assess this point by point before I can be sure. The tie-breaker tests for cases of double tax residence are set out in Article 4 of the Agreement.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Hello, Marcos!
Thank you for your interest in our content. If I understand you correctly, you moved out of Brazil several years ago, but you haven't formalized your departure, nor do you currently have any income from Brazil. It would be necessary to confirm the facts, but this points to your situation as a non-resident, which would only need to be formalized. You can have a company in Brazil, Marcos, the point is that the Simples legislation prohibits micro-companies from having a partner domiciled abroad. But it could still be a Presumed Profit company. Brazil and Chile have an agreement to avoid double taxation, which allows other alternatives to be discussed.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Hello, Wellington!
Thank you for your interest. Your situation is indeed somewhat complex, and possibly a case of double tax residence. It's still possible to correct your permanent departure, if that's the case. But the important thing would be to be able to understand your situation in more detail, which goes beyond the limits of this post.
This is a case where I suggest a consultation. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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First of all congratulations for the content Vinicius! I intend to live in Portugal next year, but I will not work there, only my wife, I intend to keep the tax residence in Brazil because I have a company and income from applications (which will support us there) I understand that there is no problem in doing this, because if I leave it will be very difficult to keep the accounts here in correotas etc ... but I am in doubt at the time of the declaration next year and in the banks if I can put the address of Portugal, without making the fiscal exit or does this generate some "inconsistency"? Anyway, I'd like to have your contact details for any further questions and I'd like to consult you to help me with any other issues that may arise.
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Hello, Luis Miguel!
Thank you for your interest in our content. From your description, I understand that you live in Brazil and work remotely for a company in Costa Rica. If this is indeed the case, and your situation is not just for a few days, but on a permanent basis, then yes, you are liable to pay income tax in Brazil on the employment income received abroad.
Brazil does not have an agreement with Costa Rica to avoid double taxation, and from a quick search, it seems that Costa Rica does not allow you to offset Brazilian tax, so there would be no reciprocity. You would need to be sure how Costa Rica views your situation (salary remuneration seems to be taxed less for non-residents there). From the little I've researched about Costa Rica's rules, to find out how this would be viewed by Brazil, everything indicates that there would be double taxation in your case, yes, unfortunately.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Hello, Ricardo!
Thank you for your confidence in our work. We have assisted clients moving to Portugal, and the combination of Portuguese local rules and the Brazil-Portugal agreement is very favorable, including in cases of double tax residence.
We're happy to make an appointment, either now or when you've made a more concrete decision. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Dr. Vinicius, thank you very much for your reply. The advantage of the simple national tax is enormous. Given the size of my business and the requirements of local e-commerce (by simple national) it is almost impossible or complicated to take the matter by presumed profit. The amusing thing for a person who sees Brazil from the outside is how difficult it is for a Brazilian to declare a temporary residence or to be an e-citizen in Brazil in order to do business here.
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Hello, Vilmar!
Thank you for your interest in our content. If the fighter is a tax resident in Brazil, as a general rule it will be taxable income. In this case, the US federal income tax can be offset as a credit. The income tax return program itself does this (with the amounts already converted to reais). I've covered how to do this conversion in this text.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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I'm retired and I want to get a d7 visa to live in Portugal.
But I have an INSS pension in Brazil and a private pension as well as financial investments that pay dividends.
At first it seems to me to be better to have double tax residency, even paying in Brazil and Portugal (10% for non-habitual residents).
Do you have any suggestions or help? -
Hello Vinicius. First of all, congratulations on the post.
Having read all the information, however, I still have one question.
I've been living in Italy for four years, where I have no income or assets, just like in Brazil. It's precisely for this reason that I made my final exit declaration.
Now there's the possibility of me working remotely for an office in Brazil and I don't know how I should go about it.
Do I declare my income (salary) in Brazil and pay the taxes there, even with the exit declaration? Or do I declare it here in Italy?
Thank you -
Good afternoon Dr. Vinicius, how are you?
Very good article.
I have a question:Through a donation from my father, my brother and I received his 50% of the property and the other 50% remains the property of our mother.
She remains resident and tax resident in Brazil.
My brother and I live in Germany, with our tax addresses in Germany.Now we want to sell this property, and we don't know how to proceed with the federal or German tax.
What about the taxation of this asset?
Thank you in advance
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First of all, I would like to congratulate you, Dr. Vinicius, on your excellent article.
My question is this: I intend to spend 10 months in England, studying and working (if possible). I intend to return to Brazil before completing one year, so I would continue to maintain my tax residency in Brazil. Questions:
1. Do I have to fill in the tax form month by month for the amounts received?
2. The amount would be the gross amount and not the net amount that I will actually receive, which I would have to enter in carne-leão and inform the amount of tax, if any, so that it can be offset?
3. After the 10 months, can I stay in Brazil for two months and return to England to continue studying and, if necessary, work as well, without leaving the country permanently?
Thank you in advance for your attention. -
Hello, Dr. Vinicius!
What's up?
I have a question and I'd like to make sure I've understood correctly.
If I move to Germany to work but want to keep my company in Brazil under Simples (which it already is), there would be no problem as long as I don't leave Brazil permanently, right? If I also have tax residency in Brazil, I wouldn't need to change anything about my company, right?
Thank you very much and congratulations on the content.
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I've been living in Australia for more than 12 years, I left permanently but now my parents want to give me an inheritance in advance. Which would be a property, since I don't live there anymore would it be better to sell it and have them send me the money or if I have property in my name will I pay tax in Brazil and Australia?
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Good morning Vinicius, your article is very good and enlightening. My question concerns the definition of permanent residence - what exactly constitutes permanent residence? If I have my own property in Brazil and a rented one abroad, would my permanent home be in Brazil? Thank you in advance for your clarification.
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Hello, Nigri!
Thank you for your interest in our content. Both ways are possible, but certainly, if you receive a property as a gift in anticipation of an inheritance and then sell it, you will realize capital gains in both countries. Brazilian law allows the transfer to you to be made at market value, so that your parents can pay income tax on the capital gain in Brazil in advance. For real estate, this can be interesting tax planning, especially if the Australian side treats this situation in the same way.
It would really only be possible to give a recommendation in a consultation, or with an analysis of the documents. But I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Good evening Vinicius Tersi !
I've been checking laws and resolutions for weeks... and I think I've come to the conclusion that it would be better to file my sister's tax return. She left the country in 2000 for Luxembourg and didn't do the DSDP, after which she got married, acquired nationality (which at the time she had to opt for in 2008). Then she was granted dual nationality in 2017 and retired to Luxembourg in 2019. In November last year, she returned to Brazil, but she didn't feel like it, but she bought a property (because she didn't want to pay for a hotel), a car and opened an MEI to help her family in some way. She doesn't want to have a tax residence in Brazil because she has 2 daughters and grandchildren in Europe. I really need your help! Do you think my reasoning is correct? Because I think it's no longer logical due to the length of time she's been absent from Brazil to do the DSDP and at the time she had nothing to declare, even if she did, I believe the time for the IRS to collect has passed. Do you think that the MEI could harm her in this matter, or would it be more correct for her to maintain double tax residency, since there is a treaty with Luxembourg regarding IRPF and its appropriate deductions?
Sorry for the long text and thank you in advance. -
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Hello, Rosi!
Thank you for your interest. This will depend on the nature of the help you receive. If it can be understood that it is a donation, then there would be no income tax, but state inheritance and gift tax (the rate varies from state to state, but is always a maximum of 8%). In this case, this state tax would be collected according to the rules of the state in which you live. It's worth mentioning that the STF has ruled that it is unconstitutional to levy this tax when the donor is resident or domiciled abroad, as long as there is no complementary law regulating the levy.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Hello, Sued!
Thank you for your interest in our content. Your questions are too complex to answer in a post, a consultation would be more advisable. The MEI is incompatible with being a non-resident. If you want to resume your tax resident status in Brazil (which seems to have little support, for your sister's situation), then it would be preferable to formalize in such a way that there is no question about your sister's status as a non-resident in Brazil for the last 5 years. The agreement with Luxembourg is applicable, and may bring extra benefits, but this is an issue that deserves to be addressed in consultation, in order to better understand your sister's specific situation.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Hello, Joaquim!
Thank you for your interest. I can't tell you exactly what to do on the Portuguese side (a professional from Portugal is better suited to help you), but we have had experience with some clients in Portugal who ask us for a document from the Receita Federal attesting to their tax resident status in Brazil in order to obtain benefits in Portugal, such as the Portuguese non-habitual resident (RNH) regime, or the Regressar Program. We have had difficulty obtaining this type of declaration from the IRS.
I don't know if I can help you in this specific case. It would have to be clearer what you need to do on the Portuguese side, so that you can be sure what procedure to carry out in Brazil. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Hello, Eduardo!
Thank you for your interest. The situation you are describing is entirely possible (to remain tax resident in Brazil during the 10 months you are in England, and then return to Brazil, without the future return to England necessarily characterizing a tax exit from Brazil).
In the case of your salary, you would be liable in Brazil for the carnê leão month by month, according to your income. What can be offset against foreign income tax in Brazil must always be the equivalent of income tax. Social security contributions are not income tax and therefore cannot be offset. It is possible to argue that they should be deductible from the gross salary, in order to tax the net salary, but this is not expressly provided for in the legislation. Brazilian rules only mention the deduction of official Brazilian social security contributions, not foreign ones. Therefore, the most conservative approach would be to consider gross salary, although it is possible to argue in favor of net salary.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Good afternoon and congratulations on the article.
I have a question about income tax and I'd like to know if I can ask you. I have an aunt who is Chilean and has lived in Brazil for 10 years, has a permanent visa and is an MEI. I file my income tax return without any problems. However, I have a question that I'd like to know if you can help me with. Last year the Chilean government paid out a pension fund due to the pandemic, an amount that can only be received after retirement. Some people believe that this is a taxable amount, others do not. I don't think it is because there was no capital gain, it's money that originated in Chile at the time she lived and worked there. She is not yet retired. Do you have any legislation that mentions that this amount is not taxable? If you can enlighten me, thank you. -
Hello, Cida!
Thank you for your interest. Normally, the IRS will understand that income from abroad will be taxable, unless there is an exemption stating otherwise. In the case of the emergency aid given by the Brazilian government, this was recognized as a taxable amount (although most of the beneficiaries are in the IRPF exemption bracket). So I don't see a provision that implies that this amount received from Chile won't be taxed.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Hello, Lucas!
Thank you for the compliment. Brazil has an agreement with France to avoid double taxation, which offers some benefits, including double tax residency. Depending on your context, it could be an alternative. The final exit situation does encounter regulatory obstacles. My hope is that these will be resolved by 2023 with the regulation of the New Foreign Exchange Law, but this is not yet concrete.
I hope I've helped. If you need our support to analyze your situation more calmly and allow you to see which alternative would work best for your goals, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Hello, Roger!
Thank you for your interest. If you sell a property in Brazil, the capital gain on the sale is taxable here. However, you and your brother's situation (non-residents) is a little different from your mother's (resident). The tax in Brazil is still 15%-22.5% depending on the amount of the gain (15% up to R$ 5 million), but the calculation, according to the IRS, doesn't allow for benefits based on how long you've owned the property or other tax incentives.
The method of payment is also different. The tax is withheld at source (by the buyer or by an attorney for you in Brazil), and the tax is paid on the same date as the price is received. You don't file an income tax return in Brazil, but whoever is responsible for collecting the tax files a withholding tax return (Dirf), stating that the tax is payable by you.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Hello, Carolina!
Thanks for the question and the compliment. If you work remotely for an office in Brazil as an individual, they will have to withhold income tax from your salary at the non-resident rate (25%, without progression). As you are tax resident only in Italy, it could be argued that, under art. 15 of the Agreement, there would be no withholding tax, and you would pay income tax only in Italy. This is a procedure that will have to be assessed by your employer, as it is clear that they would need to take a legal risk on something they are not used to. There are procedures to allow you to validate the procedure with the Receita Federal.
There are situations in which people set up legal entities to provide services to clients in Brazil. In this case, the company would have to opt for Lucro Presumido, and not Simples Nacional. The profits would be distributed as dividends, and at this point you have to consider whether or not the procedure would be advantageous from Italy's point of view (Italy taxes dividends, unlike Brazil).
I hope I've helped. If you need our support, just make an appointment with me by contacting me at WhatsApp or by e-mail contato@tersi.adv.br!
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Hello, Fernando!
Thank you for your interest. It's worth mentioning that, in the case of the INSS, taxation only exists in Brazil (in my experience, the 10% in Portugal provided for the RNH is for private pensions, not the INSS). Given the current regulation of financial investments in Brazil, double tax residency often works very well in the Brazil-Portugal relationship.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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Hello, Luiza!
Thank you for your interest and your compliment.
As a non-resident, the alimony situation is expressly provided for by the IRS (taxation of 15%, without any progression). So it makes sense to think about how to make the transition from today's situation to the next one while minimizing risks. As Canada and Brazil have an agreement to avoid double taxation, there are benefits that can help.
It's very difficult for me to give a recommendation per post without knowing your situation. This is a case for a consultation. If you need our support, just contact my support team at WhatsApp or by e-mail contato@tersi.adv.br!
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Good morning,
I am Portuguese and have tax residency in Portugal. However, after marrying a Brazilian national, I came to live in Brazil where I have been living and working as a dependent worker for 9 years, paying all the taxes on my work in Brazil and declaring my income tax in Brazil every year, as well as having a permanent visa to live in Brazil. Now I need to transfer some of the money I have earned here in Brazil (on which I have paid taxes and declared annually here in Brazil) to Portugal. My question is this: As my working income has already been taxed and declared here in Brazil, will I have to pay more tax in Portugal on this working income when I receive the money by bank transfer into my bank account in Portugal? Thank you very much and congratulations on the site.
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Hi Vinícius, thanks for the great article.
I have a question.
I work for an English company, and I receive my salary in a bank account in England.
I currently live in Brazil and would like to maintain dual tax residency. I pay taxes in England (salary taxed as normal).
I would like to submit these wages to the IRS here in Brazil, but in a way that I don't have to pay taxes again here in Brazil (as I understand it, it would be through the reciprocal credit method).
How is this credit method operation carried out? -
Good afternoon!
I'm moving to Portugal, but I'll continue to work for a Brazilian company. I won't be leaving for tax purposes at the moment. I'm applying for residency in Portugal, but they already consider 183 days in Portuguese territory to be tax residency.
How can I avoid double taxation of my income in this case?
The material above is excellent. -
Hi Doctor, what's up?
First of all, thank you for the excellent content.
I'd like to ask you a question to find out if my case can be appealed or not.
I've been living in Japan for a long time, I send money to Brazil sometimes, I haven't declared my permanent departure because I'm still moving and I have financial investments in Brazil.
This year will be my first year declaring the IRPF.
I'd like to know if it's obligatory to declare these remittances that I send to myself for income tax purposes.
If so, would it be in the "received from individuals/abroad by the holder" tab?
I'm confused because if I do it this way, when I simulate the income tax return, I have tax to pay of 44,000 reais on the remittances I made.
I'm confused because everyone says something different and as the amount to be paid is high, I'd like to be sure of what I'm doing.Is there a bilateral agreement between Brazil and Japan?
Could you help me?
Thank you in advance.
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Vinicius, I am English married to a Brazilian woman for 12 years, we lived in England until I retired in 2020, we sold up and came to Brazil. I have a residencia in Brazil We intend to stay here for the foreseable future we are building a house in Londrina My question is I have a company pension in the UK which I transfer every month to Brazil, do I pay double taxation on this pension, does it have to be declared in Income Tax Any information would be grateful. Regards Tim Hill Sent from my iPad
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Good morning ! I would like some information, my uncle is a foreigner living abroad and receives a pension, in the income statement there is only the amount in other items 05, and in 07 complementary information the amount of gross taxable income and withholding tax. My question is it necessary to declare?
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Hello Vinicius, I'd like to thank you for the perfect material you've provided. After several readings I still have a doubt and I would like to know if you can guide me.
Does an individual resident in Brazil who receives self-employment income from individuals or legal entities located in France have to pay income tax in Brazil?
If I'm exempt, how do I report this exemption on my tax return?
Thank you in advance.
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Good morning, Vinícius:
Congratulations on your work, excellent article! My question is about Ireland. I'm moving there in September and I'm supposed to earn my income there. I have investments in Brazil and it is clear to me that it is very worthwhile to maintain double tax residency. I've already checked that the country isn't on the list of nations that have a double taxation agreement with Brazil and I haven't been able to find out from any source on the internet whether there is tax reciprocity between Brazil and Ireland. Where can I find this information?
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Good evening Vinícius. Congratulations on your work! Really enlightening.
I have a question about dual tax residency for Brazilians living in Brazil. My children were born in the USA and have dual citizenship, although they returned to Brazil as children and have lived here ever since. Now that they are adults, a financial institution where they have a checking account is asking them to prove that they do not have tax residency abroad and is threatening to block their account. Can they do this? Is it legal?
Because they were born in the USA, I understand that they automatically have tax residency in that country. However, they do not have, nor have they ever had, a job or income in that country. Does the Brazil - USA Reciprocal Treatment Agreement waive this requirement made by the financial institution? Thank you -
Good afternoon, Vinicius.
Congratulations on the article. Very enlightening.
I live and work in Portugal and have left Brazil for good. I want to open an online store in Brazil to sell info-products. I will receive the sales in a Brazilian current account, in Brazilian real. With the double taxation agreement activated, is it possible to pay taxes only in Brazil, at source (since the % rate is lower), or am I obliged to pay in Portugal? Should the double taxation agreement between Brazil and Portugal be activated in the country where I receive the income, in Brazil? Or where I have my tax residence? If it's in Brazil, do I have to go there to activate this agreement or can I do it remotely?
Thank you in advance for your clarifications.
Best regards.
Thank you.
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Hi Vinicius,
I'm Brazilian and I've been living in Canada for 5 years. I am already Canadian and I work here in Canada and receive my salary here.I plan to go to Brazil this year and spend 4 months working remotely. During this time, my company in Canada will continue to pay my salary in Canada.
Could you tell me if there is any risk of me having to pay income tax in Brazil for this 4 months of remote work?
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Good afternoon,
Excellent content. Thank you for sharing it.
I've been living in Germany since 2019 and declared my permanent departure from Brazil in 2020. I live here with my husband, who works and earns a salary here and has also declared his departure. As it happens, I got a job in a Brazilian company (home office) and have been working since December 2021. Under German law, because I'm resident here, I have to pay tax on this income earned in Brazil.
However, with the exit declaration and since the source of payment withholds directly from the source, I pay 25% in tax (non-progressive) plus the INSS percentage, totaling around 35/36%.According to the reciprocity agreement between Brazil and Germany, I believe I only need to pay the difference between the tax paid in Brazil and what would be paid here (I think it would be 10%, I already pay the health insurance), but I imagine that the INSS is not included in this amount and that the calculation basis is 25%, is that right?
In this case, I wonder if I shouldn't reverse my non-resident status, considering that I would be in the 27.5% category, but with an effective tax of 9.74% instead of 25%; and also that I don't send my redemptions to Germany (I make investments in Brazil).
Is it possible to reverse this condition by filing a tax return?
Would the tax in Germany be the 27.5% or the effective rate?Thank you very much.
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Vinicius, excellent information! Thank you very much for this publication.
I have a difficult question to answer and I've searched the entire internet but I've heard different opinions on the subject.
Could you help me?
I lived in Canada for many years, resigned from my job there and returned to Brazil in October last year.
Now this year I have received a tax refund for the period I worked in Canada. (This refund came about because they took more tax than they should have - but as far as I was concerned, the money returned was part of a gross amount received while I was resident in Canada). Brazil and Canada have a tax agreement. Would this tax refund be taxable in Brazil? -
Hello, Vinicius!
Thanks for the content and congratulations on your mastery of the subject! Very enlightening!
I have a question, please, considering the recent regulatory developments in Brazil, is there any possibility for an individual investor to fit into the general taxation regime for investing in the Brazilian financial market while living abroad, but wishing to maintain tax residence in Brazil (dual tax residence). Considering all the assets earned abroad are declared and taxes paid to the RFB. The ultimate goal would be to return to Brazil in the long term. -
Hello Venicius, good afternoon!
First of all, thank you for the content. I've been looking for information on this subject and each house is different, isn't it?
I'm Brazilian but I've been living in the United States for 17 years. I never paid taxes in Brazil because I didn't have the income to do so. But here, my husband and I pay. I have dual citizenship and he only has one. He was born in Brazil and had to renounce his citizenship at the time. Anyway, we were thinking of moving to Brazil, but then there are a lot of questions?!
1. First, he's retired. I don't work.
2. Will we have to pay both taxes when we move to Brazil? All income is generated in the United States, the social security and retirement investment accounts we have here are all in his name because the retirement account is individual, and I'm the beneficiary of all of them.
3. What about his pension money, every month when it is sent to Brazil, does he pay tax on the amount of that money?
In short, we would like clear and solvable answers. -
Good morning. Congratulations on your texts.
My wife and I are Portuguese but we have lived and worked in Brazil for 15 years. We have been doing the DIRF for 15 years and have no income in Portugal.
We're going to retire and we'll both be entitled to a Brazilian pension for the time we worked in Brazil and a Portuguese pension for the time we worked in Portugal.
Neither in Brazil nor in Portugal are pensions subject to income tax, because the amount is so low.
We don't have any other kind of income apart from pensions.
My question is this: should I do the DIRF?
If I do the DIRF, do I have to declare the value of the Portuguese pension, even though it is not subject to tax in Portugal?
If I declare will I be subject to tax here in Brazil?
Thank you in advance for your reply. -
Hi Vinicius, the two articles I've read on tax residence are very good! Congratulations.
I'm in the process of expatriating to Mexico, and I'll still have a contract (I'll be on unpaid leave) with the company I work for in Brazil, and I'll be hired by the same company in Mexico (an American multinational). This contract is, of course, a temporary 2-year contract.
So in Brazil the only income I'll have is the rent from my property (I'll be renting it out during my absence), as well as investments. My income (salary) will be received in Mexico. My intention, at the end of the 2 years, is to return to Brazil, and I even plan to buy a plot of land and build another property during the 2 years. I've already checked that Brazil and Mexico have a bilateral agreement.
My idea at the moment is to maintain dual tax residency.
As the definition of "definite intention" is subjective, my question is: would keeping my investments in Brazil, continuing to file my tax return every year, including income from Mexico, having my own rented property and a temporary work contract for two years be enough to justify my intention to return to Brazil?
Thank you very much!
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Good morning Vinicius, well explained.
Congratulations!!!My situation is similar to Alex's. I also live in Germany. I also live in Germany and, out of necessity, I opened an MEI in Brazil for home-office work.
I have already left Brazil permanently and, for income/investment reasons, I would like to return to being a Tax Resident in Brazil, but continue living here.
I don't know the process and I don't know if it's worth it.
Could you give me some guidance on this?
When you have this "German Desk" content, I'd like to access it.
hugs and thanks -
Mr. Tersi,
Thank you very much for all the information. I would like to make an appointment, if possible, for us to meet in SP, for a consultation, on my next visit to Brazil at the end of July/beginning of August.
I've lived in the United States for 30 years and would like to retire in Brazil. Unfortunately I didn't get rich but I'm choosing to return to my homeland. I need help because I want to import my husband and we plan all this without thinking about the Lion. Thank you. Cheers and success to you! -
Hello, Dr. Vinicius. Thank you very much for the content.
I live in Spain and my salary is taxed at 10%. Now, I went to file my income tax return and was told that I should have been taxed at 24% for being a tax resident in Brazil. I haven't received anything in Brazil since April/21. Does that make sense? Thank you very much for your attention -
Good evening! I've been living in Canada for almost 5 years and I have Canadian citizenship. I have a permanent job here and all my investments are in Canada.
However, I started sending money to Brazil by wise this year, but as I've never declared income tax there, I don't know if I'm doing something illegal or not.
My goal is to keep my money invested in Canada, but to have part of it in savings in Brazil.
Do I need to declare anything in Brazil? Am I doing something illegal?
Thank you! -
Good afternoon, first of all I'd like to congratulate you on the excellent article, very complete!
I've lived in Spain for 14 years and I'm currently working here in Spain, at which time I made the Definitive Declaration of Leaving the Country.
Now, in August of this year, I intend to return to Brazil for good, leaving my job in Spain.
As I understand it, next year I'll have to file a tax return in both countries, since under Spanish law I'll be considered a resident in 2022 because I've lived there for more than 183 days and in Brazil I'll obtain resident status from August 2022 when I return to live there permanently. I don't intend to work in Brazil in 2022, so I will only have income from my work in Spain until July 2022.
My question is:
- Since I already have taxes withheld from me in Spain for the 2022 work, I can first file the IRPF in Spain with the global assets and
- After submitting the IRPF from Brazil including the income received in Spain, I understand that the income received abroad will be entered as exempt, since when I received it I was a non-resident for Brazil, so I only have to declare these amounts under "Assets and Rights".
- in my case, I don't need to use the offset or credit method since when I received the income abroad I was considered a non-resident in Brazil, so I use the exemption, is that correct?
Thank you in advance! -
Good afternoon.
I was born in Brazil in 1959. I came to the US in 1988 due to marriage. I am currently divorced.
I have been an American citizen since 1998. At the moment I have no financial ties in Brazil. I'm thinking of returning to Brazil permanently. I'm going to sell my house. After expenses I will have about $ 350,000.00. I also have a 401K with about $ 80,000.00. My retirement would be about $ 26,000.00 a year. What are my tax obligations with regard to the money I'm taking to Brazil and also the tax to be paid on my retirement? Thank you very much -
Hello, Vinicius,
Great content. I have doubts about my case and how I should proceed. I work for a Portuguese company and before the pandemic started I worked in Lisbon, Portugal. However, since the beginning of the pandemic I have been working in Brazil for almost 2 years. Now I have received notification from my company that I need to start declaring in Brazil, as I no longer have tax residency in Portugal but in Brazil. How should I proceed? Does the company in Portugal no longer have to declare? And do I declare everything here in Brazil? What are the taxes here?
Thank you
Vinicius -
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Good afternoon
First of all, congratulations on all the content.
I'm Portuguese, with a company and real estate income in Portugal and this year I've decided to buy a house in Brazil (worth more than 1 million reais) and I intend to live in Brazil for a period of about 4 years (in principle without salaries or income from Brazil). As I understand it, under the agreement my salaries in Portugal won't be taxed in Brazil, but I'll still have to declare this income for income tax purposes, because as I have assets in Brazil and I'll be there for more than 184 days, I'll be obliged to pay income tax, right?Thank you very much for your clarification.
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Good morning,
I work at a university in the UK. Next year I'm going to do a 14-month research period at a university in Brazil. I won't have an employment relationship with the Brazilian university, because my salary will be paid by my university in the UK. I would like to know what the tax implications are of the fact that I reside in Brazil during this period and receive my salary in the UK. What formal requirements do I have to meet? Do I have to pay the Carnê-Leão even if my salary is not transferred to Brazil?
Thank you very much!Thank you very much,
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Clear, comprehensive text and content that I would say is in the public interest 🙂
I have a question that I would like your opinion/advice on: I have lived in Portugal for over 10 years and I have dual citizenship, in this case Brazilian and Portuguese. I'm a salaried employee and I file a tax return here in Portugal. I haven't made a final exit declaration, so I understand that I have tax residence in both countries (although I only declare tax in Portugal). My questions are:
1) I have to declare it in the IRPF just as I declare it here in the IRS.
2. Will I have to pay tax in BR and PT? (I understood that not given the agreement and the rules)
3. The fact that I haven't declared in Brazil for 10 years (I don't have any income or money), how can this be corrected?Thank you
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Good afternoon, Dr. Tersi
I'd like to start by thanking you for your generosity in making precise guidance on the various subjects covered in your blog available to everyone.
After reading this article I was left with some doubts, so I'll recap below what I've understood (correctly, I hope), apply it to a specific case and finally ask a question.
My son recently moved to Germany, where he started working, but has chosen to maintain his tax residence in Brazil, where he has invested his savings. That's why he's not going to formalize his definitive departure from the country with the Receita Federal: he will continue to file his tax return in Brazil and will now have dual tax residency.
Since you earn your salary in Germany, you are taxed according to local law. As a result, you will also be tax resident in Germany, where you will file your annual tax return, which will only include income earned in Germany.
As has been explained very well, Brazil and Germany do not have an agreement to avoid double taxation, but the IRS recognizes reciprocal treatment between the two countries. This is why, in addition to the income earned from financial investments in Brazil, salaries received in Germany will also be included in your tax return to the Receita Federal. These salaries will be entered on the Receipts from Individuals/Exterior tab, together with the amount of tax withheld at source by that country. German federal taxes are higher than the 27.5% charged here. Therefore, after converting the currencies (euro to dollar and dollar to real, according to Central Bank rules) and declaring the taxes already paid in Germany, there would still be a surplus of tax paid, favorable to the declarant. In other words, nothing owed to the Brazilian tax authorities.
The big question is: my son and his wife, who also works in Germany, don't have EU citizenship or permanent residency, but only a work visa ("Blue Card") in his case, and a family reunion visa in hers. Would the German tax authorities have the legal basis to demand that income earned exclusively in Brazil also be declared in Germany, in order to collect any tax differences? Isn't it precisely to avoid this kind of double taxation that international agreements - or in Germany's case, reciprocity - exist?
And finally, a question: does your office file tax returns (for the German tax authorities) for Brazilians who work and live there?
Thank you for your attention.
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Hi Vinicius,
Congratulations on the content and thank you for sharing your expertise.
I'd be grateful if you could help to clear up my doubts.
Does the Brazil-Canada agreement to avoid double taxation include income from financial investments in Canada?
I live in Brazil and am a tax resident in Brazil only.Thank you
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Good afternoon, Vinicius.
First of all, I'd like to congratulate you. Your blog is one of the most informative sources on the topic available on the internet, with easy access for anyone.
On Dual Tax Residency. As you mentioned, you must declare taxable income earned abroad in your annual IRPF returns. However, two questions remain:
1 - Can people with a fixed employment relationship in a foreign company also file this declaration and benefit from non-bi-taxation? When I read the article, the consultant's example made me think that perhaps only people who perform services / PJs can benefit.
2 - There is a mention to declare this income as "exempt income earned abroad (Agreement rule)". I haven't identified this item in the IRS program. Wouldn't it be under "Taxable Income Received from Individuals Abroad"?
Thanks again for the content!
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Good afternoon Dr. Vinicius. Your articles on taxation are very interesting. I am Brazilian, resident in France since October 2020 and I have an ME in Brazil, from where I draw my income. Last year, I filed my tax return here in France with the Brazilian personal income tax return and also showed my company's earnings statements. I was taxed here in France with what they call global tax. Is this correct? Doesn't that characterize double taxation? Since the taxes have already been collected directly at source in Brazil.
Thank you so much!
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Dear Vinicius
I have just read several of your posts and I have to say that for the first time someone manages to be clear on the subject of tax residency. I had already tried the IRS website, youtube, other blogs, facebook, etc, but you, thanks to your excellent didactics and knowledge, managed to explain this "black box" created by our IRS with legal terms.
I live in Sweden and I've made my exit declaration.
As we receive rents in Brazil, after reading your blog, I thought about declaring the revenue again and having double tax residency. can I do this now in October or will I need to wait until January? -
I have dual nationality (Brazilian and Portuguese). I live in Brazil and file my income tax return every year. I have a CLT employment contract with a Brazilian company and an opportunity has arisen to provide services for a Portuguese company. The option chosen would be to provide services as a Portuguese person using a Green Receipt similar to our MEI. What would be the best option to send the income from this service to Brazil? Would it be double-taxed?
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Good afternoon Dr. Vinicius
Excellent article!!!I have a question. An income tax client was studying in Australia. He finished his studies last year, started working this year and will be living in Australia permanently. He is a partner in a company in Brazil and receives pro-labore and interest income on equity from that company. He also earns income as a rural producer from an area of land given to him by his father. He still lives in Brazil. How should I proceed? Should he leave Brazil permanently even though he has assets? Should the income, both Australian and Brazilian, be taxed in both countries? Note: In both countries the income reaches the maximum income tax rates.
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Hello, Yessika!
From your account I was unable to extract the information necessary to inform you of the need to submit the declaration.Non-resident foreigners are not obliged to file an income tax return in Brazil. Instead, the INSS (or another source of payment) must withhold 25% of income tax at source. If your uncle is in this situation, but has not informed the source of payment of his non-resident status, it is possible that the RFB may incorrectly understand that he is obliged to file a tax return because of the cross-referencing of information about his retirement.
I hope I've helped. If you need our support, just contact us atWhatsApp or by e-mail contato@tersi.adv.br!
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Hello, Cicera! Thank you for your interest in our content.
To answer your questions, we need to take into account that Brazil and the United States do not have an agreement to avoid double taxation and that under US rules, citizens and people with a greencard pay federal taxes in the country even when they do not reside there. Despite not having an agreement with Brazil, the countries have reciprocal treatment, so it is possible to offset the federal tax paid in the USA against the tax due in Brazil.
Thus, if you move to Brazil, you will be obliged to declare income in the country and, if the tax paid in the US has a lower rate than in Brazil, you will have to pay the difference here.
Although I can't make a detailed analysis of the situation because I don't have all the information on your case, I hope these brief comments have helped.
If you need our support or would like a specific analysis for your case, just contact us atWhatsApp or by e-mail contato@tersi.adv.brit will be a pleasure to serve you! -
Hello, João Paulo! Thanks for the compliment and for your interest in our content.
From reading your report, I understand that you plan to maintain dual tax residency. If this is the case, it is possible to continue investing in Brazil as a resident without having to register as a non-resident investor.
I hope I've helped. If you need our support, just contact us atWhatsApp or by e-mail contato@tersi.adv.br!
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Hello,
Very good article, I have a question, I have investments in Brazil, I have CDB, Treasury Direct and everything, but I'm moving to France, and I will work there, but I would like to have double tax residency, because I want to continue with my investments, and eventually send money to Brazil, to have more investments.
My question is, can my salary, which I will receive in France, be taxed in Brazil, because the deductions from the French state happen automatically, but I would like to know if I need to declare my French salary in my annual declaration, and if so, can I have to pay tax on it?
I know that the amount I send to Brazil (remittance) will be deducted from IRPF at source, at least I saw that on remittance online, but my question is about my salary. Because depending on the euro rate, if I earn a minimum wage in France, I would pay 27.5% in Brazil.
In short, I want to keep sending money to Brazil to buy CDBs, etc., but I don't know if this will make me pay Brazilian tax on my French salary.
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Hello Vinícius, thank you very much for sharing this content. I'd like to ask you a question.
My husband and I moved to Switzerland this year. My husband owns a company in Brazil, for which he continues to work remotely and earns a monthly income in the form of dividends. In Switzerland he also has a business, but he has an employee contract and the income is paid as salary, not as pro-labore or dividends, with tax withheld at source. I was unemployed in Brazil, but I declare income tax on my investments. How would the tax issue look in this case if we don't leave permanently? Should the Swiss salary only be subject to the country's tax rules, without the need to pay the "carnê leão" and pay the difference in tax rate? What other rules should be observed?
Switzerland will be the country of residence in which we will spend most of our time, and in which we have a rented residence with a contract in our name. With the exception of an investment in a stock brokerage, we have no real estate or other assets in Brazil.
Thank you so much!
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Good afternoon!
I have declared my permanent departure and live in Germany. My husband doesn't pay tax on my retirement income when he declares his income tax, due to an agreement that I don't understand exactly what it is. My question is whether I've done the right thing by making my permanent departure, since I've just discovered that I have some restrictions in Brazil, including that of taking out a mortgage in Brazil, which I would need this coming year. Since Brazil and Germany don't have this double taxation agreement, what is the advantage of me declaring my permanent departure? -
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Hello, Dr. Vinicius,
Your texts are very good, of exemplary quality, and have helped to clarify many doubts.
However, I still haven't made up my mind and I'd like your help.
I moved with my family to Germany in August 2022 and my husband is working here. We have a property and investments in Brazil (investments in funds, treasury bills...). We will be working in Brazil until July 2022. We intend to stay for less than 5 years.
My question is: if we have dual tax residency, will we have to pay tax on my husband's salary in Brazil or will we be able to write off the taxes we have already paid here (30%)? If we can write it off, where should we declare it? In your opinion, would it be better to leave permanently or keep the double tax residence (in Germany)?
Thank you in advance. -
Good evening, Vinicius. What's up? I'm currently living outside Brazil, but I'm not sure that I'll stay here in the long term. Until now, I hadn't known about dual tax residence, which in my case seems to be the most interesting, given that I have investments in Brazil, which I don't intend to transfer abroad yet, as well as rented property.
If I decide to keep both tax residences, do I need to inform the IRS in any way or just file my income tax return as normal, stating the amounts received abroad and the taxes paid on them?
Thank you
Danilo -
Great content, Dr. Vitor! Congratulations, it was very helpful. But I still have a question: in the case of a person who is moving to Indonesia (from what I have researched, there is no agreement to avoid double taxation) to stay for a short period of time for work (up to 3 years) and send all the salary received there to a Brazilian account, will he be taxed by the tax there and the total of the IRPF in Brazil? Is there a reciprocity agreement? Or even: can he deduct the tax rate of what he paid there VS the Brazilian rate on his own and only clarify it in the event of an inspection by the RFB?
Thank you in advance! -
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Hello,
I loved your content and so far it's the most informative I've found on the subject. 🙂I'm moving to Ireland because I've been offered a job there. I would like to keep my investments and income, accounts and a company that I currently have in Brazil without being bi taxed. I know a little about how the carnê-leão works, but I don't understand 100% about the legislation behind it.
I know that I can post expenses and receipts abroad for tax purposes.
I'd like to know if I can do that. Unfortunately I'm going to the gray part of Ireland on the map above, so there's no bi tax agreement.
Income taxes there are around 30% (income tax, social insurance, and universal social charge).
If these fees could be deducted via a tax return, I could keep my residence without declaring permanent departure and without having to close my accounts, but I'm not sure if I can make this deduction because this is a country that doesn't have this agreement.
I know that Ireland has some incentives for non-residents, for those who want to maintain that status, where you can not pay tax on income not brought into the country when you are not domiciled, so you would not be taxed there on income from here.What do you think about this situation?
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Good evening,
I have dual citizenship (BR- IT), a real estate company in Brazil where I declare normally with an accountant. My entire income comes from Brazil, do I have to pay any tax living in Italy? I receive the profits and intend to buy property in Italy with the amounts remitted from Brazil.
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I have a friend who is a director and has been working in Spain for 2 years. He has tax residency in both countries and has dual citizenship (Brazilian and Spanish). During this time there he never declared his income tax in Brazil as an individual but only in Spain and my question is whether he would have had to declare this difference of 3.5% (because I know that in Spain the individual tax is 24% and in Brazil it is 27.5%)? If he collects the difference of 3.5% in this 2-year period that he stayed in Spain with tax residence in Brazil too, should he file a rectifying tax return? What sanctions could he face? And what should he do about Spain (should he take any action?)? Sorry for the lot of questions, it's just that I'm very interested in the subject and I know that Brazil has an agreement with Spain that is in force and serves to avoid double taxation (by the way, do you know if this agreement is statute-barred?).
Thank you -
Excellent content!
I've been living in Sweden for a little over a year. At first it was supposed to be temporary, but now it's become permanent. I have no interest in leaving Brazil for tax purposes, given my economic interests there. In this case, I understand that I have to declare my Swedish income in Brazil, correct? Is this done when I fill in my income tax form or do I have to do it monthly via carne leão?
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Vinicius,
Please help. I know that Brazil and England recently signed an agreement to avoid double taxation.
Following the logic of your post, from this agreement, I could treat the income from the salary I receive in England as "exempt income" instead of using the logic of the Meat Loaf.
However, in the Receita program, under "exempt and non-taxable income", there is no option to deal with this situation. Could the "99 - Other" field be used?
Thank you in advance!
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Hello Vinicius, thank you very much for all your articles. They are very enlightening and have helped me a lot. I moved to Germany in the middle of last year and, in principle, the best option for me would be to maintain double tax residency. I just have one question: in the IRPF declaration in Brazil, is it possible to reduce the calculation basis for calculating the tax due with the amount paid as social security in Germany?
Thank you very much for your attention! -
Hi Vinicius, congratulations on a very enlightening article.
Here's my question. I'm moving to Italy, but I receive dividends from a presumed profit company in Brazil. These dividends will have to be declared and there will be tax to pay. I will also have a salaried job in Italy, but taxation will be low due to the applicable deductions.
If I maintain dual tax residency, the remuneration for the work will have to be declared as income from abroad in the DIRPF, and even if I offset the tax already paid, there will probably still be a balance. Can that other tax paid on dividends be included as tax paid abroad, to increase the amount to be offset?
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Thank you very much for this text, all the points are very interesting!
I now live in London and maintain these two tax residences (SP and London), my question would be, how would I declare my earnings here? I looked in the (exempt) tab and couldn't find it, nor in the (other) tab.
Also, what rate would I use, which day?
Thank you very much for your clarifications. -
Hello Vinicius, I have a question: I have dual Brazilian and Italian citizenship. I work in Portugal as an Italian contractor and I have tax residency as a European citizen in Portugal and I declare income tax in Portugal as an Italian. In Brazil I have an MEI and I declare personal and corporate income tax when I do Free Lancer services for Brazil. My question. Does my bank account in Portugal, which I have as an Italian citizen, need to be declared for income tax in Brazil? Because I have a tax address in Brazil to declare as a Brazilian and in Portugal to declare as an EU citizen.
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Congratulations on your content. Very enlightening. I have a question about double tax residence. I'm retired and receive my income in Brazil but live in Portugal. I opted for the RNH (Non-Habitual Resident) in Portugal where for retirees there is a rate of 10% for ten years. I haven't left Brazil permanently because I still have a mortgage, investments, rents etc....I file my tax return in Brazil as normal. This year I'm going to file my tax return in Portugal. My accountant has told me that, in principle, I will have to pay the 10% of income tax even though I have no income in Portugal and have already paid income tax in Brazil. Is this correct? Wouldn't that be double taxation? And how can I change this situation? Thank you in advance.
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I really liked your text and your answers. I have a question, I'm going to the United States, I'm going to get married and I'll probably get a green card, which means I'll be resident in that country and I'll also have a tax address and I'll have to declare my income. I don't intend to work there. I intend to continue to have a tax address here in Brazil as well, as I have assets here and receive pensions from the INSS and private pensions. Will I have to pay tax there (EU) on my income from my pensions here? Is there also a risk of losing my pensions because I live in another country?
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Hi Vinicius. Thank you very much for the information. I'd be grateful if you could clarify a question regarding the Brazil-Switzerland bilateral agreement.
If you live and work in Switzerland indefinitely and want to maintain double tax residency, leaving only financial investments and bank accounts in Brazil:
1) Does Switzerland qualify as the state of residence and, therefore, income from work and financial investments in Switzerland are exempt from tax in Brazil and the financial investments I have in Brazil are subject to Swiss rules?
2) Should both employment income and financial investments in Switzerland be declared as exempt and non-taxable income in Brazil?
3) In this case, is it necessary to present any documentation proving that Switzerland is the "center of vital interest" or is this exchange of information automatic? If so, what kind of document is usually requested?
Thank you in advance -
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Hello, Vinicius.
Thank you for this enlightening and very useful post.
I'm a Brazilian civil servant working remotely. I intend to live in France for a few years, continuing my work for Brazil.
So I'll have dual tax residency.
Given the agreement between Brazil and France to avoid double taxation, will I continue to pay tax on my public salary only in Brazil and declare it as exempt income in France?Thank you
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Hello Vinicius and the blog!
I'm just stopping by to thank you for our conversation, and to let people who read your content know what a great job you do with your consultations.
Just to clarify that I'm not paid or part of Vinícius' team. My comment here is for people who, like me, live abroad and end up losing sleep at night because they don't know what to do with their investments in Brazil. The legislation is unclear, each bank/brokerage operates in a different way, agreements complicate matters even more, and no one can guarantee anything. Talking to someone who specializes in this makes all the difference.
I've been living abroad for six years and have left money idle in Brazil. I wanted to get that money moving again, and my chat with Vinícius was great. He iterated points we already know from his content here on the blog, explained more nuances, and, above all, gave me his professional point of view and the experience he has representing clients in the same situation.
This was excellent for me, because it was exactly what I needed. Not just to base myself on the law, but also on what actually happens in everyday life with people in similar situations. I really enjoyed talking to him.
Hugs to everyone and good luck!
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Hello, Vinicius,
I would like to congratulate you on the excellent content of your articles. I've been living in Germany for 2 years as a salaried employee, but I've kept my dual tax residency until now.
In order to declare the income from the salary received in Germany in the "carnê-leão", should the net amount received be declared or should it follow the same IRRF rule in Brazil (gross salary minus social security contributions and Rente (in Germany))? What should be the calculation basis for declaring the salary?
Art. 16 of IN No. 208/2002 only mentions that income received from sources located abroad must be declared in the tax return, but does not determine the calculation basis.
Thank you!
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Excellent text, Dr. Tersi.
I'm surprised hardly anyone is talking about this. Just from the comments, you can see how many people are in this situation. You've managed to perfectly cover a topic that not many people do.
I was able to understand the situations you explained very well. However, I have a question because the country I'm in is the UAE (United Arab Emirates). From your descriptions, the one that seems to fit me best is Dual Tax Residency. Today, I earn a salary and live in the UAE. I checked on the map that UAE-Brazil have an agreement. However, Brazil still considers the UAE a tax haven. I left Brazil on July 23 and have not left permanently. How should I proceed in this case? Do I have an obligation to declare income abroad in my Brazilian tax returns? And if so, will it be exempt? Thank you.
Best regards,
MS
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