If you are planning to move abroad, whether temporarily or permanently, it is essential to understand how the tax exit process works. Tax residency determines your tax obligations with the Federal Revenue Office, and failing to regularize your status may result in undue charges or even penalties. To avoid issues and ensure that your departure is handled correctly, two mandatory procedures must be completed: the Communication of Definitive Exiting and the Definitive Exiting Statement. In this article, we explain what these documents are, who needs to fill them out, and how to properly complete the process to avoid future tax complications.
What is the definitive exiting statement?
The definitive exiting statement is a formal procedure before the Federal Revenue Office (Receita Federal) in which the native brazilian formally declares that his fiscal residency will change for a time period that exceeds one year, or even, permanently. This process occurs through the Definitive Exiting Statement (DES) – Declaração de Saída Definitiva – and it is completed by the Letter of Definitive Exiting. (LDE).
The DES (Definitive Exiting Statement) is the final income tax declaration that must be submitted to the Federal Revenue Office by anyone leaving Brazil for more than one year or permanently. It serves to formalize tax residency change and report all income earned up to the departure date. Submitting the DES ensures tax compliance and prevents double taxation on income earned abroad.
It must be kept in mind that the DES is not the same document as the LDE. By so, The LDE serves to notify tax authorities of your official change in tax residency, specifying the exact date of departure. It must be submitted between your exit date and the last day of February of the following year.; the DES is the last income tax extract by the time that the brazilian is still a resident and indicates the period of time of 1st January until the date of exiting.
Who is obliged to make this statement?
Any Brazilian leaving the country for more than one year—whether permanently or temporarily—must submit the DES. Even if the initial plan is not to change tax residency, staying abroad for over a year triggers the obligation to regularize tax status.
What are the consequences if this declaration is not submitted?
If the DES is not submitted, the citizen continues to be a resident in Brazil, and any revenues obtained abroad might be taxed by the Brazilian government, even if the revenue was already taxed by any other country’s fiscal office.
How can this statement be fulfilled?
To complete the DES submission, individuals must provide the required documents, including CPF, RG, passport, and proof of income and assets. The process is done through the Federal Revenue Office’s online tax declaration system (DIRPF). Once submitted, a confirmation protocol is issued as proof of compliance.
What happens to the CPF after this declaration? Will it be cancelled?
No. The procedure of the DES does not entail the cancellation of the CPF. The document continues to be valid in all territories of Brazil and can be utilized as usual for financial transactions, real estate purchases, etc. The only thing that changes with the Definitive Exiting Statement is that the owner of that CPF is classified as non-resident for taxing, becoming exempted from fiscal obligations applied to residents in Brazilian territory.
Conclusion
The Definitive Exiting Statement is an essential process that is obligated to Brazilians who want to move abroad in a permanent or prolonged period of time. We from the Amina Welten Guerra’s Law Firm can assist you to comprehend and measure the impacts of this procedure through your legal consulting, in addition to ensuring that all the requirements from the Brazilian Government are fulfilled. Count on us to make your move abroad smooth and hassle-free.
André L. C. Delziovo
