MORE ABOUT TAX CONSEQUENCES ARISING FROM COVID-19:

DETERMINING TAX RESIDENCE OF INDIVIDUALS IN HOME OFFICE IN BRAZIL

Abstract

The Covid-19 situation changed the way we deal with different situations, including home office. In this sense, the present work analyses the determination of fiscal residence of Brazilian individuals who have residence abroad, however came to Brazil during the pandemic situation and in the country started to word at home. In order to do this, first, we analyzed International Tax Law and the importance of determining a connection with a country in order to impose taxation. After that, it was analyzed the residence as a criteria of connection, which is linked to the personal aspect of the taxpayer to create a link between the State and the taxpayer, to justify the imposition of taxation. From this on, all the rules provided for in Brazilian legislation were shown to consider an individual as a resident or non-resident in Brazil, both rules applicable for Brazilians and for foreigners. Then, the rules for the definition of residence provided for in the OECD model convention, which establishes the tiebreaker rules in case of double residence, were analyzed. In the end, we analyzed the two proposed cases: (i) the first, of a Brazilian resident in England (a country that does not have a tax treaty with Brazil to avoid double taxation of income), who came to Brazil during the Covid-19 pandemic, and failed to return to the country; and (ii) the second, a Brazilian resident in Portugal (a country that has a treaty with Brazil to avoid double taxation of income), who came to Brazil during the Covid-19 pandemic and was unable to return to the country. In the first, it was considered that, according to the Brazilian rules of residence, the Brazilian has no intention of staying in Brazil, having no fiscal residence for the first twelve months of his stay in the country. In the second case, it was considered that the Brazil-Portugal Convention resolves double residence for Portugal, based on the application of the tiebreaker rule.