The Federal Revenue Service’s Normative Instruction No. 1924 was published on February 20, 2020, in the Federal Official Gazette and regulates the 2020 Individual Income Tax Annual Adjustment Statement, being the information from the base year of 2019.
Please note that the deadline for submission starts on March 2nd and ends on April 30th.
The Annual Return of Adjustment is mandatory for all those who:
– These are Brazilians with taxable income above R$28,559.70 in 2019;
– They received exempt, non-taxable or withholding taxable income (such as bank savings) of more than R$40,000;
– They carried out transactions of any kind on the Stock Exchange;
– They have assets totaling more than R$300,000;
– They had some capital gain on disposal of goods and rights;
– Have revenue of more than R$142,798.50 in rural activity in the year 2019 or intend to offset losses in rural activity from previous years;
– They became residents in Brazil in any month last year.
People who are over 65 years old and are exempt from paying income tax should select the option Annual Adjustment as the way to tax the Accumulated Income Received. It is important to point out that people of the above-mentioned age who are not exempt must select the option exclusive taxation at source; this portion will be added to the taxable income.
It should be noted that those who can prove, by means of a medical report issued by the municipality, state, or union, a disease related to the list of diseases already disclosed by the RFB are exempt.
The Annual Adjustment Statement can be filed in the following ways:
- computer, through the Declaration Generator Program (PGD) for fiscal year 2020, available on the website of the Special Secretariat of the Federal Revenue of Brazil (RFB) on the Internet at http://receita.economia.gov.br;
- computer, by accessing the service “My Income Tax (Extract of DIRPF)”, available in the Virtual Service Center (e-CAC) on the RFB website; or
- mobile devices, such as tablets and smartphones, by accessing the application “My Income Tax.
Furthermore, when filling out the assets and rights of the Annual Adjustment Declaration, it is necessary to inform whether they belong to the owner or the dependent, and include the respective CNPJ or CPF.
Furthermore, there are certain assets or values that are exempt from inclusion in the Annual Adjustment Declaration, namely:
- The values in current accounts or financial applications do not exceed R$140.00;
- The movable goods and rights that were purchased for less than R$5,000.00;
- The set of stocks, shares, and financial asset gold that were purchased for less than R$1,000.00;
- Real debts or liens in the amount equal to or less than R$ 5,000.00
We point out that the possibility of deduction for those who contributed to the Social Security of domestic employees was suspended due to the loss of validity of the legislation that regulated the benefit.
Individual Income Tax will be calculated according to the table below, in which the calculation basis corresponds to the total sum of the assets earned in the fiscal year, i.e. 2019:
| Calculation basis (R$) | Rate (%) | Portion to deduct from IRPF (R$) |
| Up to 22,847.76 | – | – |
| From 22,847.77 to 33,919.80 | 7,5 | 1.713,58 |
| From 33,919.81 to 45,012.60 | 15 | 4.257,57 |
| From 45,012.61 to 55,976.16 | 22,5 | 7.633,51 |
| Above 55,976.16 | 27,5 | 10.432,32 |
Failure to file the return on time will result in a fine of 1% on the fraction of the months in arrears, with a minimum value of R$ 165.74 (one hundred and sixty-five reais and seventy-four cents) and a maximum value of 20% of the total Income Tax due.
The Individual Income Tax can be paid in eight successive monthly installments. However, there are some caveats:
- if the amount of tax payable is less than R$100.00, it must be paid in a single installment;
- The installments cannot be less than R$50.00;
- The first installment or the single installment must be paid by April 30, 2020.
The main change regarding this year’s Individual Income Tax is the advance of the calendar for the payment of refunds, which will start in May. Still on the subject of the refund, this year the Brazilian Federal Revenue Service will make the payment in five lots, and no longer seven as in previous years.
The Tax Law team at DDSA – De Luca, Derenusson e Schuttoff & Advogados is available for further clarifications and is able to fully assist you with your Annual Individual Tax Return.