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Hello, Sandra!
Thank you for the compliment.
According to Central Bank rules, sending funds from abroad to the CDE is free, as is returning money from the CDE abroad. The difference is when the money is used in Brazil. Currently, transactions over R$ 100,000 are subject to controls similar to those of a foreign exchange remittance. A normal account has similar controls at the time of the exchange remittance, i.e. when the funds enter/exit Brazil. Exchange controls are normally intended to comply with the Central Bank, not the IRS.
As for taxes, there is an IOF on the transfer of your resources from abroad to the CDE and vice versa, but not income tax, because it is a transfer of assets, not income. There would be income tax if the transfer itself is a means of paying income (for example, paying for a service). Income tax will be due if you, as a tax resident in Brazil, receive income abroad, even if you never bring it to Brazil.
I hope I've been able to answer your question. If you prefer, feel free to contact our team by WhatsApp or email!
Hello, Michael!
Thank you for your interest. We will soon be publishing a text on the new Law 14.286/2021 (the result of the conversion of the Foreign Exchange Bill into law). This law promises to provide a better solution to your problem from 2023, when the new law comes into force.
Until then, the regulations really make it difficult for you to keep your Treasury Direct account after you have handed the bank the letter of communication requested by the RFB. I dealt with this problem (and I'm due for an update) in the text on the "non-resident's dilemma": https://tersi.adv.br/aplicacoes-financeiras-no-brasil-o-dilema-do-nao-residente/. There I deal with the subject in more detail than I could in a commentary.
Feel free to contact our team by WhatsApp or email!
Hello, Mauricio!
Thank you for your interest in our content. We follow both issues closely (on the first, we even took part in the Public Consultation that led to the September/2021 standard). We are currently preparing an update of the content to deal with non-resident accounts and new material on international remittances and the impact of the New Foreign Exchange Law.
We don't expect a profound change to come with the change that took place in September 2021, as the problem of non-resident financial investments was ignored (even though we spoke directly to DEREG/BACEN about the issue). The big news promises to come in 2023, when the New Foreign Exchange Law comes into force. This will depend on the regulations to be published by the Central Bank this year. The expectation is that bank accounts will become simpler (a change of registration, rather than the need to create a new restrictive account) and that financial investments will not have the same problems as they do today. But it's still too early to be sure about this future.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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!
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!
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!
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!
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!
Hello, Elcio!
Thank you for your interest in our content. The simplest and most straightforward way is for the couple to have a CDE in Brazil to receive the funds, with you taking care of the tax collection and other demands made by the tax authorities and the bank.
I don't see a problem with you receiving money into your account and then sending it to your daughter and son-in-law. But the CDE regulations prevent the use of the account in the name of a third party, so this is a gray area in BACEN's regulations. To resolve this in a practical way, I suggest you contact the bank or institution where you want to make the exchange, to agree in advance what documents they will ask for and to be sure of the institution's internal policy on this matter. This will avoid headaches later on, when they ask for documents to justify why you are acting as an intermediary to send money abroad that belongs to someone else.
Your question is a good one, and it comes up time and time again. The Central Bank is due to open a public consultation shortly to announce what it intends to make a new rule from 2023 and open it up to suggestions. We'll pay attention to your point when it comes out.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
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!
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!
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!
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!
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!
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!
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!
Hello, José!
I hope you're well. Your situation has been frequent. Unfortunately, I don't know of a bank that would open a CDE today for a lower fee than Banco Rendimento. In 2023, it is expected that the New Foreign Exchange Law will change the account situation, and perhaps make it possible to maintain your bank account normally, allowing you to inform the bank that you are not a tax resident in Brazil.
You are the most important person to make a decision about your affairs, José. From our side, we are here to support your decision-making. I hope I've helped you. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
Hello, William!
Thank you for your interest. There is no possibility of submitting a tax return from more than five years ago, so there is no way of submitting a tax return for 2013. At the same time, submitting an exit declaration now in 2022 would mean that you were a tax resident in Brazil in previous years (and therefore had to pay global income tax on the amounts received before then).
It's usually a case of being sure of the context of each client. In cases where no return has been filed in the last 5 years, one possible way is to file the DSD for the oldest possible year (currently 2018/2017), paying a late penalty (approx. R$ 170). When dealing with this type of service, we take care to report the facts as they occurred, to minimize the risks in the event of an inspection.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
Hello, Johnson!
To answer your question, the ID or RNE also continue to exist as before. No one loses their identity because of permanent departure. In the case of the ID card, the immigration rules apply. I hope to write a post in the future clarifying the situation of the expatriate foreigner who comes to Brazil to take up a position in a Brazilian company for a certain period. If you have any further questions, we're happy to help, or you can get in touch via email or WhatsApp to find out more about our work.
