Making Aliyah and becoming a non-resident affect certain tax obligations in Brazil. As a result, individuals question their tax data and reports after the status change.
This article covers key aspects of CPF and Annual Income Reports for New Immigrants in Israel. It aims to clarify the process and helps avoid potential complications in managing tax responsibilities.
Brazilian Individual Taxpayer Registration (CPF – Cadastro de Pessoas Físicas)
The CPF is a database code managed by the Federal Revenue of Brazil (RFB). According to Law No. 14,534/2023, CPF is a unique identification number in Brazilian public services.
Brazilians living in Israel must keep their CPF active and regularized. Individuals residing in Israel are required to register to CPF if, for example:
- They own real estate and/or conduct business dealings in real estate in Brazil;
- They have bank, savings or investment accounts in Brazil;
- They operate in the financial or capital markets in Brazil, including stock, commodity, futures and similar exchanges; or
- They have assets and rights in Brazil subject to public registration or specific registration, including real estate, vehicles, vessels, aircraft, financial instruments and equity interests or in the capital market.
Thus, CPF is essential for several operations, such as financial transactions, real estate transactions, consular services and managing assets in Brazil.
Brazilians in Israel can request the CPF’s registration or regularization via RFB’s email. Keeping the CPF under regulation is essential to avoid impediments in transactions and services related to Brazil.
Annual Income Report in Brazil
Non-residents do not have to file an Annual Income Report in Brazil (DIRPF), even if they have goods or conduct commercial activities in Brazil. As previously mentioned, they are only required to keep their CPF active and regularized.
Income and capital gains received in Brazil by Brazilians residing in Israel are subject to taxation. Although, there are some applicable exemptions and reductions. The tax is withheld in Brazil and considered definitive. No additional tax obligations will be required.
In some cases, the Non-Resident’s legal representative should collect the tax income through the “Carnê-leão” program. “Carnê-leão” is used to pay all the monthly income tax. Additionally, the tax rate will depend on the nature and amount of income received.
In other cases, income tax is paid through the Capital Gain Program (GCAP). The remitter domiciled in Brazil must withhold the tax, and if they are also living abroad their legal representative should withhold the tax. Sometimes there are exemptions/reductions, and the rate depends on the capital gain value.
Tax payments in Brazil are done through a specific document (DARF– Documento de Arrecadação de Receitas Federais) under specific codes. Individuals who are Non-Residents cannot file a DIRPF. Thus, the remitter, whether an individual or a company (capital gain), or the legal representative (“Carnê-leão”), must include this information in their report, informing the CPF of the incoming remittance.
Brazilians leaving Brazil should complete and update their Exit Formalities, if applicable. Failure to do so may cause issues with the tax authority in the future. Non-residents often have outdated information linked to their CPF after leaving Brazil.
Our firm assists New Immigrants with tax matters arising due to relocation, which include tax planning, understanding their rights and obligations in Israel and Brazil, and more. Our firm comprises highly qualified professionals, including former officers of the Israel Tax Authority, certified public accountants (CPAs), tax consultants, economists, and lawyers.
Click here to contact a team member.
Frequently Asked Questions
Is it necessary to keep the CPF active even if you live in Israel?
Yes, the CPF must stay active and regularized for any financial or real estate operation in Brazil. Also, if are kept any assets and rights in Brazil.
Do non-resident Brazilians need to submit the Annual Income Report in Brazil (DIRPF)?
No, non-resident Brazilians are exempt from submitting the DIRPF, but they must keep their CPF up to date.
How is income from Brazil taxed for Brazilians living in Israel?
It is taxed at source in Brazil and is definitive, without the need for extra declaration by this individual.
What happens if a Brazilian does not carry out their tax exit procedure?
The individual may have problems with the tax authority, related to the tax collection by the paying source.
