Offshore for Expats: What Changes When You Leave Brazil

Anyone who leaves Brazil for good, notifies Brazil's Federal Revenue Service (Receita Federal) and files the Permanent Exit Tax Return (DSDP) becomes a nonresident for income tax. Law No. 14,754/2023 (Lei 14.754/2023) covers only residents: your offshore falls outside it while you are abroad, but falls back under it if you return and become a resident again.

Moving to another country does not change your tax situation by itself. Nonresident status depends on formal acts before the Federal Revenue Service, and it is the Federal Revenue Service that decides which law applies to your offshore, your salary and your assets in Brazil. This guide separates what the Federal Revenue Service requires on exit from what the law says about structures abroad. For the step-by-step of the exit itself, see the permanent exit and DSDP guide.

Who does the Federal Revenue Service consider a nonresident?

A nonresident is an individual who does not live in Brazil permanently. Anyone who leaves permanently becomes a nonresident on the date of departure, provided they file the Permanent Exit Notification (Comunicação de Saída Definitiva do País, CSDP). Anyone who leaves temporarily becomes a nonresident on the day after the 12th consecutive month of absence.

The Federal Revenue Service lists the cases as follows:

A tax resident, on the other hand, is, among others, anyone who lives in Brazil permanently, anyone who enters on a permanent visa, and anyone who leaves without notifying the exit during the first 12 months of absence. The full list is on the Federal Revenue Service page on who is a resident and a nonresident.

How do I notify the permanent exit and file the DSDP?

They are two separate acts, and one does not replace the other. First comes the Permanent Exit Notification (CSDP), filed on the Federal Revenue Service's online service. Then comes the Permanent Exit Tax Return (Declaração de Saída Definitiva do País, DSDP), which is the income tax return for the period in which you were still a resident.

1. •Notify the exit. The deadline runs from the date of departure until the last day of February of the following year. The form requires accepting the statement of responsibility.
2. •File the DSDP in the year after the exit. It uses the same program and the same deadline as the Annual Adjustment Return. It includes income, assets, rights and debts for the period in which you were a resident in the year of exit, under the same rules as the regular return.
3. •Pay the tax in a single installment by the date the return is filed. Debts being collected by the Federal Revenue Service must also be paid off.
4. •Tell your paying sources in Brazil the date of departure, so that they withhold tax under the nonresident rules.

The notification does not exempt you from the DSDP, from returns of earlier years that have not yet been filed, or from paying the tax assessed. If you have been a nonresident for more than 6 years and never notified, the Federal Revenue Service says to send the documentation by email, not through the form. Details are in the official notification service and on the page about how to file the return.

In the DSDP, the tax is calculated using the monthly table in force in the year of exit, multiplied by the number of months you were a resident that year.

What happens if I leave Brazil without notifying the Federal Revenue Service?

You continue to be treated as a resident during the first 12 months of absence. During that period, income from Brazilian sources is taxed like that of other residents, and income from sources abroad follows arts. 14 to 16, 19 and 20 of SRF Normative Instruction 208/2002 (Instrução Normativa SRF 208/2002). In other words, foreign income, such as the offshore's, stays on your resident radar.

From the 13th consecutive month of absence, income received in Brazil is subject to exclusive withholding tax or final taxation. But the obligation to notify and to file the DSDP remains pending. This is the most common mistake of those who leave: thinking that time abroad solves it by itself.

If there are pending issues, art. 138 of the National Tax Code (Código Tributário Nacional) removes liability, including for the late-payment penalty, when the infraction is voluntarily reported, with payment of the tax and interest due. The report is not voluntary if it comes after an audit procedure or measure related to the infraction has begun. Regularizing before being charged changes the outcome.

How is a nonresident taxed on what they have in Brazil?

Income from Brazilian sources remains subject to Brazilian tax, but under the nonresident rules. According to the Federal Revenue Service page on nonresident taxation, income paid by sources located in Brazil is subject to tax exclusively at source.

Real estate, stakes in Brazilian companies and accounts in Brazil do not disappear with the move. They remain under the rules above, and the foreign side only enters the calculation when the income originates in Brazil.

Does Law 14,754 apply to the offshore of someone who lives abroad?

Not while you are a nonresident. Art. 1 of Law 14,754/2023 covers the income of individuals resident in the country from financial investments, controlled entities and trusts abroad. Art. 2 also refers to resident individuals.

For a resident, the law works like this:

• •income from financial investments abroad and profits and dividends of controlled entities are declared on the Annual Adjustment Return, separately from other income;
• •the tax is 15% in the annual adjustment, with no deduction from the calculation base (art. 2, § 1);
• •profits determined by controlled entities in the cases of art. 5 are taxed on December 31 of each year.

These rules are for those with Brazilian tax residency. The text speaks only of residents, and the practical consequence is that its regime does not apply to someone who has lost that status. This is not a shortcut: it only holds if the exit was real and formalized, and it also depends on the rules of the country where you now live. To assess your case, see the tax planning service.

What should I do with the offshore before leaving Brazil?

Declare everything that exists on the date of exit and leave the structure documented. The DSDP follows the same rules as the regular return for assets, rights and debts of the period in which you were a resident, and the offshore held in that period is part of the picture.

Run a check before departure:

• •gather the entity's articles of organization, statements and proof of contributions;
• •check whether the amounts were already declared in earlier years and regularize whatever is missing;
• •check the Brazilian Capital Abroad (CBE) declaration, required of residents with US$ 1 million or more in assets and rights abroad on December 31, according to the Central Bank of Brazil's Declarant Manual and the CBE page;
• •confirm with a Brazilian accountant whether anything is due for the year of exit.

Law No. 14,286/2021 (Lei 14.286/2021) defines a resident as an individual or legal entity that resides, is domiciled or has its seat in Brazil, and a nonresident as one that resides, is domiciled or has its seat abroad. The Central Bank's manual uses, for individuals, the concept of resident from tax legislation.

What care does the offshore structure need after the move?

The structure keeps its obligations in the country where it was opened, and your new residence creates obligations there. A U.S. LLC with a single foreign owner, for example, is treated as a disregarded entity. IRS instructions say it must file Form 5472 with a "pro forma" Form 1120, and the penalty for not filing is US$ 25,000. See the details in Wyoming LLC for nonresidents and on the Wyoming page.

Other points of attention:

• •New tax residency. The country where you now live has its own rules on companies and accounts abroad. Confirm with a local professional before opening or keeping any structure.
• •Information exchange. Banks and financial institutions may provide information to tax authorities. Do not build a structure counting on secrecy.
• •Asset protection. It does not legitimize a transfer made to escape an existing debt. See the offshore asset protection guide and the article on offshore trusts for Brazilians.
• •Company structure. To choose between a holding and an offshore, see corporate structures.

What if I move back to Brazil?

You become a resident again on the date you arrive, if you return intending to live here or if you stay more than 183 days, consecutive or not, within 12 months, according to the Federal Revenue Service. From then on, Law 14,754/2023 applies to your financial investments, controlled entities and trusts abroad.

Plan the return in advance. What existed abroad starts being declared here, and controlled entities falling under art. 5 of Law 14,754 go back to having profit taxed on December 31. The CBE also becomes an obligation again if the total abroad reaches the threshold.

If you are a business owner, also read the article on exit tax and tax exit for business owners. For the change of residence itself, see international tax residence.