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- 13/03/24

Brazilian Tax Authorities releases the Declaration Generator Program ("PGD") for the Individual Income Tax for the year 2024, calendar year 2023 And publishes Normative Instruction on the taxation of financial investments controlled abroad.

Brazilian tax authorities released for download the Declaration Generator Program (“PGD”) for preparing the tax return regarding the 2024 financial year, calendar year 2023 (DIRPF 2024/2023), as well as new rules on submission and obligation.

Among the new features is the increase in the limit for income received during 2023 to dispense the tax return filing, due to the increase in the exemption band to R$2,640.00 (two thousand six hundred and forty reais), adjusted in May 2023. The new limits are:

  • Taxable Income: R$ 30,639.90 (previous: R$ 28,559.70);
  • Exempt and Non-Taxable Income: R$200,000.00 (previous: R$40,000.00);
  • Gross Revenue from Rural Activity: R$ 153,199.50 (previous: 142,798.50); and,
  • Possession or Ownership of Goods and Rights: R$ 800,000.00 (previously R$ 300,000.00).

Additionally, the Brazilian Federal Revenue Service published on today’s date (03/13/2024) Normative Instruction RFB No. 2,180 (“IN”), which regulates the taxation applicable to certain types of foreign investments (provided for by Law No. 14,754/23), highlighting:

  • Financial investments abroad held by individuals: taxation of Income Tax at a rate of 15%, with the tax to be calculated in the annual adjustment on foreign income (New Schedule to be included in the DIRPF).
  • Automatic taxation on profits of foreign-held subsidiaries: taxation of 15% with the tax to be calculated in the annual adjustment on foreign income (New Schedule to be included in the DIRPF).
  • Trusts: presentation of concepts and applicable tax treatment to various types of trusts.

Additionally, the IN brought details about the financial statements of controlled entities, which must necessarily be signed by an accountant legally qualified in international accounting standards (International Financial Reporting Standards – IFRS) or Brazilian accounting standards (BR GAAP). For entities in countries with favorable taxation, the adoption of BR GAAP will be mandatory.

For taxpayers wishing to update the value of their assets and rights abroad, it will be necessary to submit the Declaration of Option for the Update of Assets and Rights Abroad (Abex), through the e-CAC, and pay the due tax by 05/31/2024.

Taxpayers will be able to file their returns from March 15, 2024, until May 31, 2024.

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