Q&A about declaring definitive departure from Brazil

To avoid being audited by the Federal Revenue Service, Brazilian expatriates should be mindful of the mandatory formalizations

With the Income Tax season right around the corner, expatriates who have left Brazil often find themselves asking: “Am I required to file my income tax return?” “Am I in good standing with the Brazilian Federal Revenue Service?” To answer those questions, one needs to get acquainted with a few requirements imposed by tax authorities, such as the Definitive Country Exiting Communication and the Definitive Country Exiting Statement.

Find out below how those requirements differ from each other and when they must be filed.

Definitive Country Exiting Communication (CSDP)

Under what circumstances should it be filed?

This communication to the Federal Revenue Service must be made whenever an individual:

• permanently leaves Brazil; or
• leaves the country on a temporary basis but under the status of non-resident for tax purposes.

To learn more about the concept of tax residency, click here.

What is the deadline for submitting the CSDP?

The schedule for submitting one’s CSDP is as follows:

• Permanent departure: from the date of departure up to and including the last day of February of the following year.
• Temporary departure: from the date the non-resident status is granted up to and including the last day of February of the following year.

For instance, those who left Brazil in 2022 – regardless of month – are required to submit their CSDP by the last day of February 2023.

Under the current laws, those who miss the deadline for submission are not subject to fines, but the Definitive Country Exiting Statement must still be filed nonetheless.

The Brazilian Revenue Service advises individual taxpayers to first file their Definitive Country Exiting Communication upon leaving Brazil or being granted non-resident status.

Why is it important to submit the CSDP to the Federal Revenue Service?

By formalizing their departure, individuals are no longer considered tax resident in Brazil. As a result, earnings received abroad will no longer be taxed by the country.

Note, however, that the submission of the Definitive Country Exiting Communication does not exempt a taxpayer from filing the Definitive Country Exiting Statement and Income Tax Returns from previous years or from paying the corresponding taxes.

What happens when those who leave Brazil fail to submit their Definitive Country Exiting Communication?

Those who leave the country but fail to submit their CSDPs are still considered tax resident in Brazil for a twelve-month period following their departure.

An important implication is that, during this time, individuals must report earnings received abroad and pay the corresponding monthly installments of the income tax due.

Can a CSDP be amended?

Yes. In the event that any errors occur when filling out the information, the report should be amended. This must be done within the period in which the CSDP remains available on the website of the Federal Revenue Service.

Definitive Country Exiting Statement (DSDP)

Under what circumstances should it be filed?

The Definitive Country Exit Statement is a type of income tax return that must be submitted to the Federal Revenue Service by the following individuals:

• Those who are permanently leaving the country and have no intention of ever returning to live in Brazil; or
• Those who are legally considered non-resident for tax purposes.

What is the deadline for submitting the DSDP?

The Definitive Country Exiting Statement must be delivered in the year following the individual’s departure from the country and within the same timeframe for filing the Annual Individual Income Tax Return. Therefore, for 2023, submissions must be made by May 31.

What information should be included in the statement?

The rules that govern the DSDP are similar to those governing the “standard” income tax return, as is the information that must be supplied therein. As such, the statement should contain information pertaining to an individual’s earnings, assets, rights, liabilities etc. concerning the period during which he or she was considered tax resident in Brazil in the year of departure.

It is worth pointing out that the corresponding income tax must be paid in a single installment, by the due date for filing the return. Any debts with the Federal Revenue Service must also be settled by then.

What happens to those who fail to submit the DSDP upon leaving Brazil?

Individual taxpayers who fail to submit the DSDP to formalize their status as non-residents in Brazil are liable to supply their Income Tax Return to the Federal Revenue Service even while living abroad.

Another issue is the possibility of Brazilian authorities charging taxes on a taxpayer’s earnings abroad, regardless if they have already been taxed in the country of residence.

Additionally, individuals who fail to supply the DSDP or the Income Tax Return (DIRPF) are subject to having the status of their individual taxpayer number (CPF) changed to “pending regularization”.

Can a DSDP be amended?

Yes. Statements containing omitted or incorrect information must be rectified in the same way as income tax returns should be amended.

Move abroad without pending tax issues in Brazil

With DPC's services focused on individual taxpayers, one can move abroad from Brazil without worrying about pending issues with the Federal Revenue Service.

DPC's team of experts supports people who are planning to leave the country, carrying out the legal procedures so that expatriates remain in full compliance with the regulations. Contact us at: dpc@dpc.com.br.