Opinion – Marcia Dessen: Are you going to move to another country? See how to keep up with the Recipe

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The number of Brazilians living abroad grew by 55% in five years, from 2015 to 2020. For those who have already left, but have left assets in Brazil, and for those who are thinking of leaving for good, some advice from me and the lawyer Luciana Pantaroto.

To end your tax residency in Brazil, two steps must be taken: deliver the Communication and the Declaration of Definitive Departure from the Country.

It looks the same, but it’s not. The Communication of Definitive Departure from the Country is made through the Revenue website from the date of departure until the end of February of the following year.

The Declaration of Definitive Departure from the Country must be delivered between March and April of the following year using the same program made available annually for Income Tax returns. From that moment on, your obligation to deliver an annual adjustment statement to the Federal Revenue Service in Brazil ceases.

There’s another lion waiting for you.

Your new non-resident status must be communicated to all paying sources of income; taxation on them will change. In addition to the company where you work, if applicable, also advise banks and financial institutions in which you have accounts, investments and private pension plans, as well as real estate agencies that manage property rental contracts.

TAXES IN BRAZIL

Forget everything you know about taxation in Brazil. Many of the rules for Brazilian residents do not apply to non-residents.

Do not be deceived. Despite not being a resident, you will continue to pay tax here. Income received by legal entities is taxed at source. Those received by individuals, property rentals, for example, are taxed by the carnê-leão on the date of receipt, using a specific tax code for non-residents.

Income from official retirement (INSS) and private pensions (PGBL and VGBL), for example, are no longer taxed according to the progressive table and pay a fixed rate of 25% on the official INSS and PGBL pensions and 15% on income from the VGBL.

Owners who rent properties in Brazil while living abroad pay the tax monthly through the carnê-leão, with a specific revenue code, calculated at a fixed rate of 15%. Another example is the loss of the benefit of exemption on capital gain on the sale of property.

VOTER ABROAD

In addition to the Federal Revenue, it is convenient to notify the Electoral Court. Voting is an obligation for Brazilians, whether they are resident or not, whether they are in the country or not.

Brazilians who live abroad and choose to transfer their voter registration card to the country in which they are living are now served by an Electoral Zone in Brasília (DF) and are still obliged to vote in the elections for President of the Republic.

Those voters who do not transfer the title are still obliged to vote in all elections, and must attend the electoral zone where the title is registered.

In both cases, the voter who fails to vote must present a justification. Each unexcused absence generates a debt with the Electoral Court and, if this situation is not regularized, the voter may have their voter registration canceled and an irregular situation in the CPF.

Finally, it is worth remembering that the institutions in which current accounts and investments in financial assets are held must also be notified for registration updates and account profile adjustments. The current account held in Brazil becomes a CDE account (Domiciled Abroad Account), with specific rules for this type of account. Talk to your bank to find out what changes.

TAXES OUT THERE

Research how the taxation of the new country of residence works, there’s another lion waiting for you. Some countries have an agreement with Brazil to avoid double taxation, which can alleviate the tax burden in some situations.

If you are going to work, know that Brazil has signed social security agreements with some countries that make it possible, in specific situations, for social security contributions to be paid only in one of the countries during the period abroad. Contribution time can be considered for receiving retirement benefit in both countries.

Any income such as salary, retirement, interest, dividends and capital gains received abroad are taxable here, except as provided for in the agreements. As a rule, taxation on income abroad must be made in the month following receipt.

It is important to look for a tax specialist so that assets, debts and income abroad are reported and eventually taxed in accordance with Brazilian tax legislation, especially with regard to conversion rates of amounts in the original currency to the real.

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