Tax Residency Change: What You Need to Know Before Leaving Brazil
Originally published in the 8th day of September, 2026
The Brazilian Tax Reform, the political uncertainty typical of our historical moment and, above all, the emergence of new taxation mechanisms targeting individuals with significant wealth have triggered a widespread sense of insecurity among Brazilian taxpayers. In addition, the adoption of measures such as Laws No. 14,754/2023 (which establishes the taxation of income from financial investments and controlled companies abroad) and No. 15,270/2025 (which establishes the taxation of dividend distributions exceeding R$ 50,000.00, also providing for the introduction of a minimum tax on so-called "large fortunes") makes clear that, in Brazil, the tax burden borne by individuals tends to become increasingly aggressive.
The intensification of the tax burden, combined with a lack of confidence in the country's future development, has made the idea of living outside Brazil an increasingly attractive proposition, turning it into a genuine plan for generational prosperity.
However, the decision to leave Brazil presupposes knowledge of a series of relevant concepts and procedures, particularly in order to avoid the risks of double taxation, penalties, and failure to comply with ancillary obligations. In this context, the distinction between tax resident and non-resident takes on special importance, as it defines the scope of the Brazilian State's taxing authority. Therefore, let's take a look at some of the main topics that need to be understood by anyone who intends to change their tax residency.
Resident and Non-Resident Status - How It Is Acquired
Under Brazilian regulations, an individual is considered a Brazilian tax resident if they:
(i) live in Brazil on a permanent basis;
(ii) had acquired non-resident status in Brazil, but returned to the country with the intention of remaining permanently, as of the date of their return;
(iii) left Brazil to render services as an employee of Brazilian government agencies or offices located abroad;
(iv) left Brazil temporarily — or left the national territory permanently — without submitting their Communication of Definitive Departure (CSDP), during the first 12 consecutive months of absence;
(v) entered Brazil with a permanent visa, as of the date of entry;
(vi) entered Brazil with a temporary visa:
to work under an employment relationship or as a scholarship physician, under Brazilian law, as of the date of arrival;
as of the date on which they complete 184 days (consecutive or not) of presence in Brazil, within a period of up to 12 months;
as of the date a permanent visa or an employment relationship is obtained, should this occur before the 184-day period mentioned above has elapsed.
On the other hand, an individual will be considered a Brazilian tax non-resident if they:
(i) do not live in Brazil on a permanent basis;
(ii) leave Brazil permanently, as of the date of departure, if they filed their CSDP; or after 12 consecutive months of absence have elapsed, if they did not file their CSDP;
(iii) leave Brazil temporarily (without the intention of remaining abroad permanently), as of the day following completion of 12 consecutive months of absence;
(iv) enter Brazil with a temporary visa and remain for up to 183 days (consecutive or not), within a period of up to 12 months;
(v) enter Brazil as a non-resident to render services as an employee of a foreign government body located in the country.
Resident and Non-Resident Status - Taxation Mechanisms
Brazil adopts a mixed system of tax jurisdiction, combining the principles of worldwide taxation and territoriality.
For tax residents, the principle of worldwide income taxation applies. For this reason, an individual who is a Brazilian tax resident must subject income earned anywhere in the world to Brazilian taxation, subject to the specific rules applicable to each type of income, as well as, where applicable, the provisions of double taxation treaties entered into between Brazil and the country of origin of the income, and the possibility of offsetting tax paid abroad.
On the other hand, for non-residents, Brazil adopts the principle of territoriality. Thus, income earned exclusively abroad falls outside Brazilian tax jurisdiction. Consequently, an individual who is a Brazilian tax non-resident is subject to Brazilian taxation only on income from payment sources located within the country, usually through final taxation via withholding by the payment source itself.
Formalizing Non-Resident Status
Properly formalizing non-resident tax status in Brazil requires filing two main documents with the Tax Authority (Receita Federal): a) the Communication of Definitive Departure from the Country (CSDP); and b) the Definitive Departure Return (DSDP).
The Communication of Definitive Departure (CSDP) is an act through which the taxpayer informs the Tax Authority of their intention to move permanently abroad, allowing Brazilian payment sources to begin treating them as a non-resident, withholding the IRRF (withholding income tax) due under applicable law.
In addition to the CSDP, the taxpayer must also file the Definitive Departure Return (DSDP) in place of their next annual individual income tax return (DIRPF), intended to determine the taxes owed up to the date of departure and to close out their obligations as a Brazilian tax resident. The DSDP requires the disclosure of assets, income, debts, and capital gains existing or earned up to the date of the move (rather than up to December 31 of the relevant calendar year, as occurs with the traditional DIRPF). For example, let us imagine a hypothetical taxpayer who moves permanently abroad on 07/30/2026. In that case, instead of filing their DIRPF for the 2027 tax year, they must file the DSDP, covering the entire change in net worth that occurred between 12/31/2025 and 07/30/2026 (rather than up to 12/31/2026).
However, it should be noted that compliance with the obligations described above is not, by itself, sufficient to guarantee that non-resident status will be recognized by the Brazilian Tax Authority. This is because tax residency is a legal situation arising from the facts as they actually are, not merely from declarations unilaterally submitted by the taxpayer. For this reason, the CSDP and DSDP are said to have declaratory — rather than constitutive — effect with respect to non-resident tax status. Otherwise, taxpayers would be free to change their tax residency whenever they saw fit, escaping Brazilian tax obligations whenever it was convenient for them.
Thus, in a doubtful scenario, the tax authorities may require objective proof of the intention to remain abroad to recognize non-resident status, evaluating circumstances such as obtaining permanent residency, the transfer of the center of personal and economic interests, the relocation of the rest of the family, the cessation of professional activities in Brazil, the sale or lease of the Brazilian residence, entering into a long-term employment contract abroad, among other elements capable of demonstrating the effective transfer of tax residency.
Lorusso & Partners remains available to assist you with your tax residency change process, as well as with the preparation of personalized tax, wealth, and estate planning strategies.
