Brazil’s Tax Exit: What Changed in 2026
Leaving physically is not leaving fiscally. Law 14,754 taxes your offshore structures every 31 December — and inheritance tax abroad now has a legal basis.
Leaving Brazil physically is not the same as leaving Brazil fiscally
People who move to Chile tend to treat the tax exit as a piece of bureaucracy to be sorted out “once we’re settled”. Two recent changes make that delay expensive.
The first: for as long as the Receita Federal (Brazil’s federal tax authority) still treats you as a Brazilian tax resident, all wealth held abroad — including anything already in Chile — remains subject to the annual taxation created by Law No. 14,754/2023, even with no money remitted to Brazil at all.
The second, more recent: until January 2026, Brazil simply could not levy inheritance or gift tax where the donor or deceased was domiciled abroad, for want of federal complementary legislation — a gap decades old, now closed by Complementary Law No. 227/2026. Anyone who planned their succession around that gap needs to revisit the plan.
This article follows the sequence: what formalises the exit, what continues to apply until it is formalised, and what changed in the taxation of international inheritances and gifts from 2026.
What a tax exit actually consists of
A Brazilian tax exit is a formal procedure before the Receita Federal, distinct from a simple change of address. It arises when a person leaves national territory and meets, within the statutory deadlines, the requirements to be treated as a non-resident. There are two scenarios:
- Permanent departure: the person leaves Brazil already intending to reside abroad permanently.
- Temporary departure that converts into non-residence: the person leaves without declaring that intention, but remains outside Brazil for more than 12 consecutive months — which by itself converts their status to non-resident from that point.
Until the exit is formalised through the two acts below, the Receita Federal continues to see the person as a tax resident — and a resident is taxed on a universal basis, that is, on worldwide income, including anything generated or held in Chile.
The two acts that formalise the exit
The legislation requires two distinct, sequential procedures.
1. Departure notice (Comunicação de Saída Definitiva)
A registry notice filed with the Receita Federal stating the date of departure, with no tax calculation. The deadline runs to the last working day of February in the year following departure (or following the year in which the 12 months of absence are completed, in the converted-temporary-departure scenario). Missing it has a significant practical consequence: the tax authority’s electronic system does not allow the notice to be filed retroactively once the deadline has passed.
2. Final departure return (Declaração de Saída Definitiva do País)
Filed in the year following departure, within the same window as the annual individual income tax return (in 2026, from 23 March to 29 May). It declares income earned between 1 January and the date of departure, calculates any tax due, and settles the balance in a single payment. Unlike the departure notice, the final return can be filed late — subject to a minimum penalty — by anyone who missed the deadline in earlier years.
Note on scope: anyone who leaves Brazil without filing both remains formally a tax resident, exposed to double taxation, late-filing penalties and the risk of having their taxpayer number and financial transactions blocked. Retroactive regularisation is possible, but should be assessed case by case with professional support.
While the taxpayer number is still that of a resident: what Law 14,754/2023 requires
Between the date of the physical move to Chile and the date the tax exit is effectively recognised, the person remains subject to the rules Brazil created to discourage the use of foreign structures to defer tax — the so-called “Offshore Law”.
In summary, for anyone still a Brazilian tax resident:
- Profits of controlled foreign entities (“offshores”), where based in a low-tax country or dependency, or where the entity’s own operating revenue is below 60% of the total, are taxed automatically on 31 December each year at 15%, regardless of any distribution to shareholders;
- Foreign trusts are treated as transparent for tax purposes: in a revocable trust, the assets are deemed held by the settlor; in an irrevocable trust, by the beneficiary;
- Income from foreign financial investments (accounts, funds, securities) is likewise taxed annually, as a rule at 15%, on the period’s return;
- The law repealed the exemption that previously applied to capital gains on the sale of foreign assets acquired during a period in which the person was not a Brazilian tax resident — a detail that catches anyone planning to return to the country after years abroad.
These rules were implemented by Normative Instruction RFB No. 2,180/2024, which also governed the option — now closed for the original period — to restate the value of foreign assets at a reduced 8% rate.
In practice, this is the main argument against postponing the exit: every 31 December on which the person still appears as a Brazilian tax resident is an automatic taxation event on whatever is structured abroad, even if nothing has been realised or remitted to Brazil.
After the exit: how Brazil taxes someone living in Chile
Once non-resident status is formalised, Brazil stops taxing worldwide income and taxes only Brazilian-source income, under the rules applicable to non-residents — generally withholding at source, at rates that vary with the nature of the income (rent, financial investments, capital gains on assets located in Brazil, among others). Foreign income ceases to be declared in Brazil from the reported departure date.
This is where the benefit of Article 3 of the Chilean income tax law — exemption on foreign-source income for the first three years of residence in Chile — connects with the Brazilian tax exit: coordinating the two dates avoids both a period of full double taxation and a gap in which neither country clearly recognises the person’s residence.
What changed for inheritance and gifts: Complementary Law 227/2026
This is the most recent change, the one most often missing from available coverage — and the most relevant for anyone moving both residence and succession to Chile.
How it worked until the end of 2025
Article 155, §1, III of the Constitution always required federal complementary legislation before the States could levy ITCMD (Brazil’s state inheritance and gift tax) in cases where the donor or deceased was domiciled abroad, or where the assets were located outside Brazil. That legislation was never enacted. Ruling on Theme 825 of general repercussion (RE 851,108), the Supreme Federal Court held that, absent that federal rule, the States could not levy the tax in those scenarios — even where they had their own state law attempting to do so. In practice, there was a window of non-incidence for international inheritances and gifts.
What changed
Constitutional Amendment No. 132/2023 (the tax reform) altered the constitutional text to authorise, under a transitional rule, collection by the States while the complementary law remained unenacted. Then, on 13 January 2026, Complementary Law No. 227/2026 was signed into law, definitively regulating the matter. Under its Article 159, where the deceased or the donor is domiciled abroad, competence to levy ITCMD passes to the State of domicile of the heir or donee — that is, of the person receiving the asset, not the person giving it or leaving the estate.
In practice this means that someone who moves to Chile and ceases to be domiciled in Brazil does not automatically place their Brazilian heirs beyond the reach of ITCMD. If the heir remains domiciled in a Brazilian State, that State may levy the tax on what they receive, even though the donor or deceased was in Chile.
Note on scope: Complementary Law 227/2026 sets national general rules, but actual collection still depends on implementing legislation in each State, subject to the annual and 90-day anteriority principles. Rates, exemptions and specific effective dates vary by State and should be checked against the local legislation applicable to each heir’s or donee’s domicile before any structuring decision.
Before and after 2026
| Previous position | Current position (2026) |
|---|---|
| Without federal complementary law, States could not levy ITCMD on inheritance/gifts where the donor or deceased was domiciled abroad (STF Theme 825) | CL 227/2026 regulates the matter: competence passes to the State of domicile of the heir or donee |
| Offshore profits taxed only on distribution or realisation (deferral) | Law 14,754/2023: automatic annual taxation at 15% on 31 December, regardless of distribution |
| Capital gains exemption on foreign assets acquired during a period of non-residence | Exemption repealed by Law 14,754/2023 for the cases the law covers |
| No clear rule for a Brazil–Chile dual tax residency conflict during the transition | The updated Chile–Brazil treaty (in force since October 2025, applicable from January 2026) strengthens information exchange between the two countries |
Recommended sequence for anyone planning the move
- Map the foreign wealth structure before leaving — accounts, investments, shareholdings, trusts — to size the impact of Law 14,754/2023 while still resident.
- Plan the departure date against the tax calendar: leaving before 31 December avoids another automatic taxation event on controlled foreign entities for that year.
- File the departure notice by the last working day of February in the year following departure — without this step, the process is not complete.
- Prepare the final departure return for the same window as the annual return in the following year, calculating income up to the departure date.
- Assess coordination with the start of the three-year Chilean exemption (Article 3 of the LIR), to reduce overlap between the two systems.
- Revisit the succession plan in light of CL 227/2026, checking the domicile of each heir or donee — not only that of the asset holder.
- Confirm, against the legislation of each heir’s State of domicile, whether and how the new ITCMD rules have been implemented locally.
Formalising early: benefits and points to watch
| Benefits | Points to watch |
|---|---|
| Ends automatic annual taxation of offshores and trusts under Law 14,754/2023 from the departure date | Requires calculating and paying any tax due up to the departure date, within the final return itself |
| Reduces double taxation risk by coordinating with the start of the Chilean exemption period | The departure notice deadline is rigid — once missed, it cannot be filed for that year |
| Removes the obligation to declare worldwide income to Brazil, leaving only Brazilian-source obligations | Does not remove Brazilian heirs’ exposure to the new ITCMD under CL 227/2026 |
| Regularises your position with Brazilian paying sources, avoiding incorrect withholding | Late regularisation is possible, but involves penalties and closer scrutiny |
Common mistakes
- Treating the physical move to Chile as sufficient, without filing both the notice and the return within their deadlines.
- Leaving offshore structures or trusts unreviewed, assuming the pre-2023 deferral still applies.
- Assuming that becoming domiciled in Chile automatically places wealth left to Brazilian heirs beyond the reach of ITCMD — no longer true after CL 227/2026.
- Postponing analysis of assets bought abroad during periods of non-residence, overlooking the repeal of the capital gains exemption.
- Not checking the specific state legislation at each heir’s domicile, assuming a single national rate.
Frequently asked questions
I have lived in Chile for years but never filed the tax exit. What happens?
The Receita Federal continues to treat you as a tax resident, subject to worldwide income taxation and to the Law 14,754/2023 rules on foreign structures. Retroactive regularisation is possible, but must be assessed individually, taking into account the time elapsed and your filing history.
Does Chile’s three-year exemption shield me from Law 14,754/2023 while I am still a Brazilian resident?
No. These are regimes of different countries, applied under their own criteria. Until the Brazilian tax exit is formalised, the Brazilian rules on offshores and trusts continue to apply, regardless of what Chilean law provides for new arrivals.
Will my heirs in Brazil pay ITCMD on assets located in Chile?
That depends on the heir’s domicile, not only on the domicile of the person leaving the estate. Under CL 227/2026, if the heir is domiciled in a Brazilian State, that State may have competence to levy the tax, even where the deceased was domiciled in Chile.
Does the tax exit cancel my taxpayer number?
No. Formal departure changes your fiscal status before the tax authority, but does not cancel the CPF or sever civil ties with Brazil.
Can I file the departure notice after the February deadline?
No. The electronic system does not accept the notice outside the deadline for that calendar year. The final departure return, by contrast, can generally be regularised later, subject to a penalty.
Conclusion
Brazil’s tax exit has stopped being a mere formality: it now interacts directly with the annual taxation of foreign structures created by Law 14,754/2023 and, since January 2026, with an international inheritance tax regime that finally has the legal basis to reach estates and gifts with a foreign element. Anyone planning a move to Chile — and especially anyone with wealth already structured outside Brazil — gains by treating the tax exit, the arrival in Chile and the succession plan as a single sequence, rather than three isolated decisions.
This content is for information purposes only and was prepared on the basis of the legislation in force on its publication date. It does not constitute legal, tax or accounting advice. Every situation should be assessed individually by qualified professionals.