Brazilian Income Tax Return (IRPF)

Brazilian Income Tax Filing Requirements

If you are a tax resident in Brazil and your annual earnings exceed certain thresholds set by the Federal Revenue Service (Receita Federal), you are required to file the Brazilian income tax return, known as Imposto de Renda de Pessoa Física (IRPF). The current criteria for mandatory filing are:

  • Earning taxable income over BRL 30,639.90.

  • Receiving exempt, non-taxable, or exclusively taxed at the source income over BRL 200,000.00.

  • Earning income from rural activities exceeding BRL 153,199.50.

  • Owning assets valued at BRL 800,000.00 or more.

  • Conducting operations on stock exchanges, commodities markets, etc.

Filing Deadline

The income tax return must be submitted between March and May of the year following the income year. For instance, income earned in 2023 must be declared in 2024.

Exemptions

You are exempt from filing if:

  • You did not receive any of the specified income or own the listed assets.

  • You are listed as a dependent on another person's tax return, and your income, if any, is already declared by them.

Even if you are not required to file, you may still choose to submit a return, provided you are not listed as a dependent on another return. This can be beneficial, as it may entitle you to a tax refund.

 Frequently Asked Questions (FAQs)

  • Yes, you must declare your stock portfolio regardless of any sales. Include the number of shares, their average price, and the bank or brokerage where they are held in the DIRPF assets and rights file. If your share earnings exceed BRL 20,000.00, you must include these transactions in the variable income movements section of your Income Tax Declaration.

  • No, if you do not meet the criteria for mandatory declaration, you do not need to notify the Federal Revenue about your non-mandatory status.

  • Yes, you can maintain your tax residency as long as you file your declarations separately. In Brazil, married couples can choose to file jointly or separately. If you complete the Definitive Exit Declaration together, the Federal Revenue assumes both parties left on the same date. If not, each spouse must file separately, reflecting the correct dates of departure.

  • Yes, transferring your voter registration does not impact your tax obligations in Brazil, as these are handled by different government bodies.

  • According to Normative Instruction No. 208 of 2002, convert your income and taxes paid abroad to United States dollars at the rate set by the monetary authority of the income’s origin country on the receipt or payment date. Then, convert this amount to Brazilian reais using the Central Bank of Brazil’s rate for the last business day of the first half of the month before the income was received.

  • Per Normative Instruction No. 208 of 2002, convert foreign currency deductions and taxes paid to United States dollars at the rate set by the monetary authority of the country where expenses were incurred on the payment date. Then, convert this to Brazilian reais using the Central Bank of Brazil’s rate for the last business day of the first half of the month before the payment.

  • Yes, tax compensation is possible if there is a double tax agreement, treaty, or reciprocity with countries like the United States, Germany, and the United Kingdom. You can consult the list of countries with agreements to avoid double taxation with Brazil HERE. Foreign taxes paid can be deducted from the tax due in Brazil, provided they have not been offset or refunded abroad.

    Please note that there is no double tax agreement or reciprocity agreement between Brazil and New Zealand. This means you cannot offset any tax paid in New Zealand against your Brazilian worldwide income tax. If you have substantial Brazilian tax liability that could be minimised by offsetting New Zealand taxes, know that there is a legal but complex way to do so. We can help you navigate the necessary legal arrangements. Please reach out to us.

  • The ‘carnê-leão’ is a monthly obligation statement for Brazilian residents earning self-employment income or income from abroad. The DARF (Federal Revenue Collection Document) is used to collect taxes. DARFs can be generated monthly via ‘carnê-leão’, SicalcWeb, or through various statements depending on the case.

Pricing

  • The base fee for filing any Individual Income Tax Return, including the Declaration of Definitive Exit or the Annual Adjustment Declaration is NZ $450 (+GST).

    However, additional fees may apply based on the complexity of your declaration, including:

    • Real estate and automobiles

    • Bank accounts

    • Investments

    • Carnê-leão (monthly tax payment for self-employed individuals)

    • Capital gains

    • Payments made

    Fast-Delivery Option: If you need your declaration processed within 3 business days after signing the contract and submitting the necessary documentation, there is an additional fee for expedited service.

    Important: If you received a different fee in an email, please refer to that email for the updated amount, as it supersedes the base fee information.

  • Our hourly fee for Tax Consulting is NZ $180 (+GST).

    Important: If you received a different rate in an email, please refer to that email for the most current fee, as it supersedes this information.

  • Payments are always made in advance, before the service begins.

    For those who opt for the declaration delivery service, payment can be made in two installments: the first installment is due on the date of the service agreement, before the declaration process starts; the second installment is due within 5 days after the declaration is submitted.