February 6, 2023

Surprise for Brazilians who declare income tax

Individuals and legal entities are required to declare income tax (IR) annually. The Federal Revenue Office usually opens the deadline for filing documents between March and April. But one novelty may please taxpayers. The new President of the Republic, Luiz Inacio Lula da Silva (Workers’ Party) promised during his election campaign to extend the exemption from income tax on monthly income up to R$5,000.

President Luiz Inácio Lula da Silva has promised to extend income tax exemption to Brazilians who declare and earn up to R$5,000 credit: jeanedeoliveirafotografia/pronatec.pro.br

Surprise for Brazilians who declare income tax

However, this long-awaited reform is unlikely to materialize this year. Development Secretary Wellington Dias also said in November that Lula’s government would handle the matter. However, it is important to note that an IR reform project is currently underway in Congress.

See also: Occupations That Guarantee Exemption from the IPVA: Know Your Rights

Late schedule

The tax burden scenario for income tax is worrying. Low-income workers still have to pay taxes, given that the deduction threshold in the tax table is set at R$1,903.

This schedule was last revised in 2015, when the limits that still apply today were defined. However, the minimum wage at the time was R$788 and only those earning 2.4 times more were required to declare income tax.

Applying this range today, where the minimum wage is R$1,320, this schedule obliges taxpayers who receive only 1.5 wages to declare. Find out how the IR rate is applied in relation to a taxpayer’s income:

7% for those receiving between R$2,826.65 and R$1,903.99.

15% for those with incomes between R$2,826.66 and R$3,751.05.

22.5% for those with incomes between R$3,751.06 and R$4,664.68.

27.5% for those earning more than R$4,664.68.

Who is exempt in 2023?

As mentioned earlier, some taxpayers may benefit from income tax credits. Check below the four main circumstances that justify exemption from income tax.

  1. Exemption due to serious illness

If a citizen suffers from any of the diseases listed below, he does not need to declare income tax: mental alienation, blindness, active tuberculosis, Parkinson’s disease, leprosy, serious tumors (cancer or malignancy), acquired immunodeficiency syndrome (AIDS / HIV) human ), Paget’s disease, multiple sclerosis, thalidomide syndrome, irreversible and disabling paralysis, cystic fibrosis, severe liver disease, severe nephropathy, radiation contamination, and ankylosing spondylitis.

In this case, the interested party must submit a medical report signed by a SUS specialist confirming the validity of the disease. The consumer then has to fill out a form and send it to the IRS. Otherwise, no exemption will be granted.

  1. Exemption due to low income

Individuals whose income is less than R$28,559.70 in 2022 are also exempt from paying individual income tax. In practice, this meant that the citizen had an annual income below the prescribed minimum, which guarantees exemption from payment.

  1. Age exemption

Citizens over 65 years of age with a retirement or pension income of up to R$24,751.74 per year are entitled to exemption from IR. However, if you have other income, such as rent, you must file a tax return to collect it.

  1. Exemption due to dependencies

Natural persons identified as dependents on another statement may benefit from the exemption. However, in order to verify the data, it is necessary to submit the declaration in the government system.

See also: significant changes to the MEI category; Watch out!