Brazil: know the main changes in the Personal Income Tax (IRPF) return for 2024

Understanding the changes and the rules for this year’s returns helps to avoid problems and setbacks when submitting the information, which must be submitted by May 31 at the latest. This declaration depends on several factors, such as taxable income, exempt income, capital gains, gross income from rural activities, assets and rights, and residence in Brazil, among others. Therefore, verifying if you are obliged to declare Income Tax is essential.

Income Tax is a federal tax levied annually on income. It controls the growth of the wealth of individuals and ensures that there are no irregularities in the relationship between income and wealth.

On the website, you can import the data with the PGD IRPF 2024 program or use the pre-filled template.
Individuals who are in any of the following situations are required to submit the DIRPF to the IRS.

  • – Taxable income higher than R$ 30,639.90
  • Exempt income, non-taxable or exclusively subject to taxation at a source greater than R$ 200,000.00.
  • Capital gains from the sale of goods or rights, subject to tax
  • Realization of stock exchange operations
  • Own property and rights, including bare land, with total value exceeding R$ 800,000.00
  • Rural activity with annual gross income exceeding R$ 153.

Regarding capital gains derived from the sale of residential real estate, individuals are now required to reinvest the amount within 180 days in the purchase of another residential real estate.

In addition, it is essential to note that relevant changes have been introduced in the Personal Income Tax Return (DIRPF).One of these changes is the new simplified deduction announced by the IRS. It is set at a monthly amount of R$528 to trigger the new exemption threshold, now R$2,640.

In this regard, Brazil’s tax authority highlighted that the extension of the exemption threshold benefits those earning up to two minimum wages without significantly affecting the taxation of higher income brackets, which is a positive change for the market.
There has also been a change in how financial investments abroad are taxed, which is now based on the accrual principle rather than on a cash basis.

Other changes to consider are the Identification of the type of crypto asset in return, the mandatory filling out of the CPF of food workers abroad and the field for information on court rulings or public deeds, information on the date of return to the country of non-resident taxpayers who returned to Brazil in 2023, and the return of the 1% donation (of the tax due) to the National Program to Support Cancer Care (Pronon).

However, there are two situations in which the exemption to file the Annual Regularization Declaration (DAA) applies. One is when the individual meets one or more of the mandatory conditions listed in items 1 to 7, provided that their income, assets, and rights, if any, have been declared in a return filed by another individual. The other case is when the natural person only meets the condition provided in item 5 and whose joint assets during the marital or stable union have been declared by the other spouse, provided that the total value of their privative patrimony does not exceed R$ 800,000.00 (eight hundred thousand reais).

For taxpayers with a silver or gold-level account, the option of canceling returns directly through the website simplifies tax management. However, taxpayers must pay the utmost attention when completing their DIRPF, as the Tax Agency uses data matching to combat evasion and ensure tax justice.

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