On February 27th, 2023, the Brazilian Federal Revenue Office (“RFB”) published RFB Normative Instruction No. 2,134, which governs the Annual Adjustment Declaration of Personal Income Tax (“Income Tax Return”) for fiscal year 2023 (calendar year 2022).

The main change this year concerns the filing deadline, which starts on March 15 and ends on May 31, at 11:59:59 pm. According to the Normative Instruction, Brazilian residents who, in 2022, fell into any of the following situations are obliged to present their Income Tax Return:

1. Received taxable income subject to adjustment in the declaration, with a total sum exceeding R$ 28,559.70;
2. Received exempt income, non-taxable or taxed exclusively at source, with a total sum exceeding R$ 40,000.00;
3. Obtained capital gains from the sale of assets or rights subject to the levy of Tax;
4. Engaged in transactions on stock exchanges, commodity exchanges, futures markets, or similar operations: (a) with a total sum exceeding R$ 40,000.00; or (b) with the calculation of net gains subject to the incidence of the tax;
5. Obtained gross revenue from rural activity exceeding R$ 142,798.50 or intends to offset losses from previous calendar years or from the 2022 calendar year;
6. Had, on December 31, the possession or ownership of assets or rights, including bare land, with a total value exceeding R$ 300,000.00;
7. Became a resident in Brazil during any month and remained in this condition on December 31; or
8. Has opted for the exemption of Income Tax on capital gains from the sale of residential property, provided that the proceeds from the sale were invested in the acquisition of another residential property located in the country, within 180 days from the sale.
   The declaration must be filled out and submitted through the Income Tax Generator Program, available on the RFB website (https://www.gov.br/receitafederal), starting from March 9, 2023.

Taxpayers who possess gold or silver digital identity can file their Income Tax Return using the program “My Income Tax”, available on the RFB website and via mobile application, provided they do not incur in any of the prohibition provided in article 5 of IN RFB 2134/2023, for example, cases of receiving income from abroad, subject to exclusive and/or definitive taxation, exempt and non-taxable, and income derived from agricultural activities.

This year the taxpayer can once again benefit from the convenience of pre-filled out declaration, which automatically include information previously provided by legal entities in DIRF, DIMED, DIMOB, and Carnê-Leão, among others.

Another novelty for the fiscal year 2023 is the priority in the refund of overpaid tax to taxpayers who use the pre-filled out declaration or opt for the refund via PIX (only permitted with the CPF key). These taxpayers will be prioritized after the legal priority refunds have been processed.

Leite, Tosto e Barros Advogados’ Tax team is available to provide guidance on this matter.

*This newsletter had the collaboration of lawyer Maria Luiza Ferreira de Oliveira and partner Sérgio Grama Lima.