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Hello, Maria Antonia!
Thank you for your question. I have argued that the loss of "definite intent", leading someone to become a non-resident, is a de facto situation, which has legal consequences. The point is that the IRS has created ancillary obligations to formalize this change in tax status (the CSD and the DSDP). I've read that the delivery of these declarations is important evidence. When filed, the onus is on the tax authorities to prove that it was the other way around. When a normal declaration is filed, the proof is that the link with Brazil has been maintained, and therefore all income and assets must be reported in Brazil, whether in Brazil or abroad.
If the person has moved to another country and done absolutely nothing, it is possible to argue that they have become a non-resident, but the proof is less overwhelming.
The main question here is what should be declared and how Brazilian income tax should be collected. The answer to this question depends on the points I outlined above.
Your question was abstract, 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, Diana!
Your question about the CBE is interesting, thank you for asking it. The DCBE has a different logic to the income tax return. Each of you has to report the assets you own, regardless of the marriage regime. If you and your husband bought the property together, then you would each report 50% of the property. If the property is in the name of only one member of the couple, only that person declares. In the case of a financed property, the total value of the property applies, with an indication of how much was financed.
Regarding whether you are obliged when you are 50% each, the CBE Declarant Manual, page 8, states that:
"ATTENTION: The mandatory criterion for declaring assets in condominium (such as demand and term deposits or real estate) in the declaration of Brazilian Capital Abroad (CBE) takes into account the full value of the asset, not the individual quota of each holder, as provided for in § 4 of art. 2 of Resolution 3.(...) Thus, if the full value of the asset exceeds the limits stipulated in the caput and/or in §1 of art. 2 of Resolution 3.854, of 2010, all holders are obliged to provide the CBE declaration, in accordance with the periodicity determined by the regulations, even holders whose quotas do not reach these limits. Please note that each holder must only declare the value of their quota. Also
in the case of spouses, each must declare their share, regardless of the marriage regime or the information provided to the IRS."So, in your case, it's possible to say that yes, you are both obliged to file the DCBE, each informing 50% of the property.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
Hello, Diego!
Thank you for your interest in our content.
Your post makes two points. The first is that it would be better to formalize the tax exit from Brazil, considering the fact that you have income from abroad, which would otherwise be subject to Brazilian taxation.
With regard to stock market investment, unfortunately you're right about the regulatory restrictions. Brazil and Switzerland signed an international agreement to avoid double taxation, which came into force on January 1, 2022. The agreement brings some extra benefits to avoid double taxation of your income. Depending on your specific situation, there may be an alternative scenario, at least as long as the regulations remain inadequate.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
Hello, Carolina!
Thank you for your interest in our content. I can't talk about American taxation, although I know professionals in the US who can advise you on this.
Get in touch with our team to make an appointment. Just call us at WhatsApp or by e-mail contato@tersi.adv.br!
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!
Hello, Isabel!
Thank you for your question, it's a very unusual point to know whether a donation to a non-resident should be reported in the Dirf.
There is no income tax return for you to file because you are a non-resident. Your father will need to inform you in his declaration that he has made a donation to you, and the state tax on donations and inheritances (ITCMD) is due to the state in which your father is domiciled.
Since 2019, the Federal Revenue Service has taken the view that donations sent to non-residents are subject to 15% of IRRF (there is an IRPF exemption that is expressly provided for when the recipient of the donation is a tax resident in Brazil, but the law was silent on non-residents). If you were to follow this understanding, your father would have to collect this amount and submit a Dirf saying that he made a donation to you. I have argued that this understanding of the IRS is unconstitutional, because it charges as income tax something that is actually ITCMD. The Federal Constitution prohibits the Union from invading the tax jurisdiction of the states.
You can make your investments, if they are in real estate, as normal. There is no specific regulatory provision, only the need for a CPF. If you're going to make other investments, we have the Central Bank's regulations to take into account, and these are set to change considerably from 2023. It would be necessary to understand exactly how you intend to make the investments.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
Hello, Laura!
Thanks for the compliment. I've already written about the main problems for those who leave for tax purposes and keep bank accounts and financial investments in Brazil in this text. I've been working towards the goal of having the New Foreign Exchange Law solve these problems once and for all from 2023. The Central Bank is expected to open a public consultation on the regulation of the New Law in about 3 weeks' time. When it comes out, I will certainly write a new text.
The current version of the IN, which deals with the criteria used by the IRS for fine mesh cross-checks, is provided for in the IN RFB 2.065/2022. Basically, at least R$ 40,000/year in exempt income or income taxed exclusively at source (in other words, all financial income that doesn't involve buying and selling on the stock exchange), and stock exchange transactions that involve "hard fingers" (day-trading or selling at least R$ 20,000/month in stock exchange securities). Below these limits, the tax authorities' system has not indicated any tax debts on the CPF.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
Hello, Celso!
Thank you for your interest. Your questions are very similar to the ones I just answered for Laura. The main problems for those who leave for tax purposes and maintain bank accounts and financial investments in Brazil are described below in this text. I've been working towards the goal of having the New Foreign Exchange Law solve these problems once and for all from 2023. The Central Bank is expected to open a public consultation on the regulation of the New Law in about 3 weeks' time. When it comes out, I will certainly write a new text.
The current version of the IN, which deals with the criteria used by the IRS for fine mesh cross-checks, is provided for in the IN RFB 2.065/2022. Basically, at least R$ 40,000/year in exempt income or income taxed exclusively at source (in other words, all financial income that doesn't involve buying and selling on the stock exchange), and stock exchange transactions that involve "hard fingers" (day-trading or selling at least R$ 20,000/month in stock exchange securities). Below these limits, the tax authorities' system has not indicated any tax debts on the CPF.
The great difficulty today is that we don't have a regular way to maintain investments in FIIs, or in other securities on the stock exchange, because of the inadequate regulation by the National Monetary Council (which is responsible for the Central Bank and the CVM). That's why the New Foreign Exchange Law is so important.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
Hello, Fabio!
Thank you for your interest. As long as you remain tax resident in Brazil, your salary in the UK is still taxable here in the eyes of the tax authorities. You can offset the amount of UK tax you pay in Brazil, but if this is less than the 27.5% of tax in Brazil (which is usually the case), you will still have to pay the difference in Brazil.
For those who don't do this, in addition to the risk of a tax assessment, they will have difficulty sending the funds they have accumulated abroad back to Brazil, as they are undeclared assets.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
Hello, Marcio!
Thank you for your questions. It's a bit difficult to answer them without assessing your situation as a whole. A consultation would be more appropriate.
Under the current rules, the tax exit date would be the date on which you left Brazil definitively, or 12 months later. It would be a case of knowing which dates you left Brazil. This affects the submission of the CSDP and DSDP.
I know the information was a bit general, 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, Isa!
Thank you for getting in touch. It is no longer possible to submit a definitive exit declaration for the year in which you left Brazil, because it has been more than 5 years since this happened. Today, I believe that you are listed as a resident by the Receita Federal, but there has been no cross-checking of data that would require you to file an income tax return, so I imagine that you have never had any difficulties.
I have said that it is possible for you to justify that you ceased to be a tax resident in Brazil even without integrating the Declaration of Final Departure from the Country. In this case, you would have to gather evidence of the facts you have told. You can do this if questioned one day, or by going directly to the Receita Federal to ask for your CPF to be updated. You can also submit a DSDP for a more recent year, explaining the situation and paying a small fine.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
Hello, Leonardo!
Thank you for your question. By coincidence, I was studying this yesterday Cosit Consultation Solution 115/2021 in detail. I can understand the IRS's logic, but it creates more compliance problems than it solves, as your own question points out.
The Receita's logic was to say that any balance recovered after December 31 would be taxed at 15%, exempting up to the amount the balance was worth on December 31 of the previous year. So it depends on the date you sent the exchange and the date you withdrew it. If you sent the money with an exchange rate of 4.00, on December 31 the exchange rate was 4.50, and when you returned the funds the exchange rate was 5.00, then you would pay IRPF on the difference between 5.00 and 4.50, and not from 5.00 to 4.00. This excessively restrictive view of the law creates this kind of difficulty.
If you use the funds in the account to make financial investments or day-trade operations, this obviously creates an additional difficulty. What would make sense to me is to treat the non-interest-bearing deposit account and the financial investments made with funds held in that account as two separate things. If you have already taxed the investment, it should be considered as a cost of the amount held in the account, rather than being taxed a second time.
This new position contradicts much of what we have been considering up to now, and I have my doubts as to whether it would be accepted by Carf or the courts. In any case, only in a concrete situation will it be possible to form a well-established opinion. Until then, we'll just have to look at the legal 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, Sheila,
thank you for your interest. If the company owns the shed and rents it out, it will no longer be inactive and will be taxed on the rent. Any profits that the company makes and that are distributed to you, who live in Japan, will be treated as dividends, exempt in Brazil (and possibly taxed in Japan).
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
Hello, Erica!
Thank you for your question. Assuming you formalize your non-resident status, there are two stages to the taxation of receiving property as an inheritance: one is the transfer of the property to you by the estate. There is an IRPF tax benefit on the transfer of real estate as an inheritance, which allows you to anticipate tax by paying a lower amount. This is particularly beneficial when the heir is a non-resident, as the IRS understands that they are not entitled to tax benefits on the sale of real estate. There is a window to take advantage of this benefit.
The other stage is the sale of the property you already own. In this case, the tax on the sale is 15%-22.5%, depending on the gain (15% for a gain of up to R$ 5 million). This tax is withheld at source by the buyer and declared to the tax authorities by him, or by an attorney for him who is a tax resident in Brazil. You don't have to file an income tax return in Brazil because you have received an inheritance or sold a property. The way the tax authorities receive information is different.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
Hello, Marluci!
Thank you for your interest in our content. According to income tax legislation, the amount received as a donation is exempt from income tax. You only have to declare that you have received the donation, on the exempt income form, in order to say that it was received from your mother.
One point to comment on is that we have a state tax, the ITCMD, which is levied on donations and inheritances. The STF recently ruled that, in the case of a donor domiciled abroad, there is no formal requirement (complementary law) for the state to be able to charge this tax, so that, for the time being, it would be possible to receive this donation also exempt from ITCMD. You need to make sure that your mother is not a tax resident in Brazil (only in the UK) for this to happen. Otherwise, ITCMD will be levied, according to the law of the relevant state (maximum rate of 8%).
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
Hello, Lilian!
Thank you for your interest in our content. Yes, it is possible to make a donation from a CDE. The bank that holds the CDE will charge for documentation to prove the transfer if the amount involved is at least R$ 100 thousand.
Donation tax is usually due. The applicable law is usually that of the Brazilian state in which the donor is domiciled. When the donor is domiciled abroad, the Federal Constitution stipulates that a complementary law must determine which state has jurisdiction. In practice, each state has established its own rules on the matter and charges the tax. In 2020, the STF ruled that this charge was unconstitutional. For this reason, as long as this complementary law is not approved (today there is only a bill in Congress), it is not possible to demand state ITCMD on a donation when the donor is domiciled abroad.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
Hello, Amanda!
Thank you for your interest in our content, and thank you for the compliment. I have argued that missing the deadline for submitting the Notice of Final Exit cannot have the effect of making someone a tax resident in Brazil for another 12 months in a row, if you have already left Brazil with the intention of losing the "definitive spirit". I talk about this in this other text. I understand that you can take advantage of the deadline for submitting the Declaration of Final Departure from the Country (May 31st) to get your situation in order.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
Hello, Eliza!
Thank you for the compliment and your interest. The law actually dates back to the 1950s, and as early as 1997 there was a normative instruction in force similar to the current one (which is from 2002). In 1999, when you left the country, it was a paper procedure.
As for the other questions, these are very complex issues to deal with in a blog post comment. Depending on the situation, it may be a case of correcting the previous declarations (to inform that you were a non-resident and made a mistake) or taking advantage of the benefits of the Brazil-Argentina agreement to avoid double taxation and regularizing everything as a non-resident. I can really only give you a recommendation during a consultation.
Regarding the DCBE, it is only applicable if you are considered a tax resident in Brazil on December 31st of each year and, abroad, have assets abroad worth at least USD 100,000 (until 2019) or USD 1 million (from 2020 onwards). Imagine that every year you take a snapshot of the value of your assets, to make it clear whether there is an obligation to file the DCBE that year or not.
I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
Hello, Leonardo!
Thank you for your interest in our content. I'm not entirely sure I understand your context. I'm guessing that, since 2018, you've been filing a Brazilian tax return reporting assets and income held in Brazil and Canada. This is consistent with dual tax residency, and the Brazil-Canada agreement can grant benefits for this situation.
If you're complying with the rules correctly, then it wouldn't be a case of rectifying previous declarations. This is where I'm not sure I understand the problem. As long as you are a tax resident in Brazil, you will need to submit declarations. After the tax exit, there are no more declarations to file in Brazil. It's only if you rectify declarations to say that you are no longer a tax resident in Brazil (for example, by replacing a "normal" declaration with a declaration of definitive exit) that it makes sense to say that you would no longer have to file subsequent declarations.
We don't have another form/program for you to fill in information about assets held in Brazil after the tax exit. When you receive income from a Brazilian source, the paying source would have the duty to declare that they paid you the income, through a declaration called Dirf (withholding tax declaration). In some cases, such as property rentals, the person who submits the Dirf is your attorney in Brazil, but this is not the case for financial investments.
Your context was confusing to me, but I hope I've helped. If you need our support, just contact us at WhatsApp or by e-mail contato@tersi.adv.br!
