The new European regulation doesn’t require closing accounts in Brazil, but it does introduce new rules for non-EU banks. Here’s what Brazilians living in Italy need to know.
A new European Union regulation could affect thousands of Brazilians living in Italy who continue to maintain bank accounts, investments, or other banking relationships in Brazil.
The new provisions will enter a decisive phase from January 11, 2027 and mainly concern the way in which financial institutions based outside the European Union can offer certain services to persons resident within the Community territory.
The news, however, must be clarified immediately: There is no European provision that requires Brazilians residing in Italy to automatically close their bank accounts in Brazil..
The change primarily affects Brazilian banks and how they can continue to provide certain services to customers residing in the European Union.
European legislation
The change comes from the Directive (EU) 2024/1619, known as CRD VI, which introduces new rules for the activities of third-country banking institutions in the European Union.
Italy transposed the directive into its legislation at the end of 2025.
Generally speaking, banks headquartered outside the EU that wish to carry out certain banking activities for customers resident in the EU will need to operate through an authorised presence within the European territory.
The activities involved include, in particular:
- collection of deposits;
- granting of loans and financing;
- issuing of financial guarantees.
This means that the regulation could have practical consequences for Brazilians living in Italy who continue to use services offered by Brazilian banks.
Can the account in Brazil be maintained?
Generally speaking, yes.
European legislation does not prohibit a person resident in Italy from holding a bank account in Brazil.
The problem is rather the relationship between the Brazilian bank and the customer resident in the EU, especially with regards to the possibility of offering new services or modifying existing ones.
Each bank will therefore have to decide how to adapt to the new provisions.
In concrete terms, a Brazilian institution could:
- continue to manage the existing account;
- ask the customer to update their address and tax residency;
- limit the ability to subscribe to new products;
- modify some contractual conditions;
- decide not to offer certain services to customers residing in the European Union.
For this reason, It is not advisable to preemptively close an account in Brazil just because of the new European regulation.
The most prudent course of action is to check directly with your bank to determine what policy it will adopt towards customers residing in the EU.
What about existing banking contracts?
The legislation also provides for transitional provisions for some contracts signed before theJuly 11, 2026.
Non-EU financial institutions will be able to continue to carry out certain activities necessary to manage existing contracts, but the rules limit their ability to renew or replace them with new contracts.
For some permanent contracts, in Italy a term of up to January 10, 2028 for their termination or transfer to an authorized intermediary.
However, there are exceptions and particular situations that must be evaluated on a case-by-case basis.
What is reverse solicitation?
One of the exceptions provided for by European legislation is known as reverse solicitation, that is, “reverse stress”.
This occurs when a customer, on their own initiative, contacts a bank located outside the European Union to request a specific service, without the institution having actively promoted that service in the European market.
This possibility may be relevant for some Brazilians living in Italy who continue to voluntarily use a Brazilian bank.
However, this does not mean that any banking service can automatically be offered to an EU resident: the application of the exception depends on the specific circumstances of the relationship.
Does having a bank account in Brazil mean having to declare it in Italy?
Not necessarily.
This is a particularly important point because two completely different issues are often confused.
On one hand there is the European banking regulation, which regulates the activity of banks in non-EU countries.
On the other hand there are the Italian tax regulations, which establish which financial assets held abroad must be declared by tax residents in Italy.
A Brazilian living in Italy can therefore maintain a bank account in Brazil, but must check separately whether, based on their tax situation, that account and any investments must be reported on the Italian tax return.
The rules depend, among other things, on the type of financial relationship, the value of the deposited sums, and the individual’s tax situation.
What is IVAFE?
For those who are fiscally resident in Italy, another element to consider is theIVAFE, the tax on the value of financial assets held abroad.
IVAFE applies to certain financial assets held outside Italy by individuals who are tax residents in the country.
For current accounts and savings books held abroad, a fixed tax is foreseen, under certain conditions. 34.20 euros per year.
There is also a threshold relating to the average balance: for current accounts and passbooks held at the same institution, IVAFE is not due when the overall average balance does not exceed 5,000 euros.
Even in this case, however, The obligation to monitor tax and to pay IVAFE are not necessarily the same thing..
The situation must be assessed on the basis of the individual conditions of the taxpayer.
What happens if the “Saída Definitiva” from Brazil has not been made?
Many Brazilians who have moved to Italy continue to have doubts about their tax residency in Brazil because they have not presented the Definitive Country Declaration, that is, the declaration of definitive exit from the country.
Failure to file a tax return does not automatically mean that the person is considered a permanent tax resident in Brazil.
Brazilian law establishes specific rules to determine when a person loses tax resident status.
At the same time, Italy also applies its own criteria for establishing tax residency.
Consequently, a person who lives permanently in Italy may have Italian tax obligations even if they maintain a bank account in Brazil and have not yet fully regularized their Brazilian tax status.
Will the Brazilian account be closed in 2027?
There is no general rule requiring the closure of Brazilian accounts of residents in Italy.
This is probably the most important distinction to make.
From 2027, the conditions under which non-EU financial institutions can offer certain services to individuals residing in the European Union will change.
The concrete consequence will therefore depend on:
- from the bank where the account is held;
- by account type;
- from the services used;
- from the date of signing the contracts;
- from the customer’s tax residence;
- on the ways in which the bank decides to comply with European regulations.
It is therefore not correct to say that “The EU will force Brazilians in Italy to close their accounts in Brazil.”.
What Brazilians living in Italy should do
Anyone living in Italy who still has a bank account in Brazil should first of all avoid making hasty decisions.
It is advisable:
- Contact your Brazilian bank and ask how customers residing in the European Union will be handled from January 2027.
- Verify that your address and tax residency are up to date at the institute.
- Check if there are any products or services that could be affected by the new provisions.
- Check any tax reporting obligations in Italy.
- Check whether IVAFE is applicable.
- Check your tax status in both Italy and Brazil.
For significant or particularly complex financial situations, it is advisable to contact an expert professional international taxation Italy-Brazil.
A fundamental distinction
The new European legislation and Italian tax obligations are two different questions.
The first concerns the way in which banks in non-European Union countries can operate towards European residents.
The second concerns the tax obligations of Italian residents who own assets and financial assets abroad.
Consequently, the fact that a Brazilian bank can continue to keep an account open for a customer resident in Italy does not automatically mean that that customer is exempt from Italian tax obligations.
Likewise, whether an account must be reported in the Italian tax return It does not mean that the Brazilian bank necessarily has to close it.
So, what changes from January 2027?
The date to keep in mind is January 11, 2027.
From that moment on, the rules governing the activities of non-EU financial institutions towards residents of the Union will enter a new phase.
For Brazilians living in Italy, the change could be primarily operational: some banks could modify the conditions under which they treat customers residing in the EU or limit the offering of certain services.
Simply having a bank account in Brazil, however, does not make it illegal and does not automatically lead to its closure.
The situation will have to be evaluated on a case-by-case basis, keeping three aspects in mind: banking relationship, tax residency and reporting obligations.
For those who live in Italy but continue to have savings, investments, or bank accounts in Brazil, 2027 will be a year in which it will be especially important to keep your banking and tax situation perfectly up to date.