2023 Income Tax: new rules in place for investors in variable income

The Federal Revenue Service changed the criteria for requiring investors to file tax returns

Are those who invested in the stock market last year required to declare such transactions in their 2023 Income Tax returns? This concern has been addressed in one of the new rules announced by the Federal Revenue Service this season, which tackles the requirement to declare investments in variable income.

How it was then and how it is now for investors

Until last year, individuals were required to declare all changes to their investments in the stock market, regardless of whether they made a profit or a loss.

Starting this year, the above requirement will only apply to individuals who performed trades amounting to more than BRL 40,000 a year, or to those who recorded net profits subject to taxation on variable income.

“In other words, if you have been selling all your stocks on a monthly basis, and their selling prices do not add up to BRL 20,000, you are exempt from paying the corresponding income tax, even if you made a profit from the trading. Thus, if the sum of a taxpayer's total sales does not amount to BRL 40,000 or more within the same year, they will not be required to file the Annual Income Tax Return", says Augusto Andrade, partner at DPC and head of the Individual Department.

The specialist views this as a positive change, as several taxpayers who were unfamiliar with the rules ended up being audited. "The new rules provide relief for those who have simply bought stocks and either failed to trade them or earned less than BRL 40,000 from their sales in 2022," he adds.

Nevertheless, Andrade warns that individual taxpayers should make sure that they do not fit into any of the other mandatory criteria for filing the tax return, such as having received taxable income exceeding BRL 28,559.70.

Check out other rules that compel taxpayers to file their Income Tax returns in 2023 here.

Attention should be paid to taxation on variable income

It is not only at the time of the annual settlement with the Federal Revenue Service that one should worry about the taxation on variable income investments.

The records of the transactions and the calculation of profit and loss should be monitored on a monthly basis. That is why investors with a solid investment portfolio usually resort to the support of specialists to ensure tax compliance.

In these situations, investors should be mindful of the taxes levied on the profits of investments made in the variable income market.

Keeping track of the taxes levied on variable income assets is a must for those who wish to comply with the Federal Revenue Service so that they can continue carrying out transactions in the stock market.

Read more: What an investor needs to know about variable income taxation

2023 Income Tax in good standing

With the support of DPC's Individual department, investors can rest assured that their income tax returns will be filed on time and in compliance with the legal requirements.

DPC's specialists also support investors all year round in calculating the taxes levied on income and in preparing their tax returns. To benefit from these services, please contact us at: dpc@dpc.com.br.