It depends on the case! First of all, it needs to be analyzed whether the tax exit was formalized or not. Whoever submitted the declaration of final departure, remains abroad and has no intention of remaining linked to Brazil should no longer submit the Brazilian income tax return. Income from a Brazilian source is subject only to withholding tax (interest, rent, etc.). The precaution is to make sure that the Brazilian sources were informed of the tax exit, to collect the tax correctly.
For those who live abroad, but never formalized the tax exit, the CPF registration with the Federal Revenue Service continues to inform the status of tax resident in Brazil. The IRS expects to receive the income tax return, which must include the income and assets existing abroad.
If the Brazilian paying sources inform the Federal Revenue of income above a certain level (R$ 40 thousand per year, in the case of financial income) without the income tax declaration having been submitted, the CPF situation changes from “regular” to “Pending regularization”, and the person may be restricted to carry out operations in Brazil until the problem is resolved.
Brazil adopts as a principle that tax residents should have their income taxed on a universal basis. Brazil has the right to tax income wherever it has been earned. Whoever is in this situation and resides abroad is in a situation of double fiscal residence. This means, for most countries, that the taxpayer must file an income tax return for Brazil and for the other country, subjecting the income earned worldwide to taxation.
For this type of case, it is recommended to read our text on the decision to formalize the tax exit from Brazil or to remain with double tax residence.
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