Federal Revenue publishes rules for the 2019 Individuals’ Income Tax Statement

On February 22, the Federal Revenue Secretariat published the RFB Normative Instruction 1871, which deals with the 2019 Income Tax Statement for Individuals (2019 DIRPF) - calendar year 2018, to be filed from Mar-07 to Apr-30-2019.

Requirement

According to the Normative Instruction, the requirement to file the 2019 DIRPF is for the individual resident in Brazil who, in 2018 calendar year:

- earned taxable income, subject to adjustment in the statement, whose sum was greater than BRL 28,559.70;

- earned exempt income, not taxable or exclusively taxed at source, whose sum was greater than BRL 40,000.00;

- had, in any month of the calendar year, capital gain on the sale of assets or rights subject to Income Tax or performed operations on stock market, commodity, futures and similar stock exchanges;

- earned, in relation to rural activity, gross income greater than BRL 142,798.50 or intends to offset, in the calendar year 2018 or later, losses from prior calendar years or from the calendar year 2018 itself;

- as of Dec-31-2018 had the possession or ownership of assets or rights, including naked land, with a total value greater than BRL 300,000.00;

- became a Brazil’s resident in any month, and remained in this condition on Dec-31-2018; or

- opted for exemption from income tax on the capital gain earned on the sale of residential properties, whose proceeds from the sale are intended to use in the acquisition of residential real estate located in the Brazil, within 180 days from the conclusion of the sale agreement (Article 39 of Law 11196/2005).

Exemption from filing

The individuals under the following situations are exempt from filing the DIRPF:

a) only in the case referred to in item "e" of the prior topic and that, in remaining the marital society or the stable union, the common property has been stated by one of the spouses or partners, provided that the total value of its private assets is up to BRL 300,000.00;

b) in at least one of the cases provided for in items from "a" to "g", if it is included as a dependent in an DIRPF presented by another individual, in which his income, assets and rights have been informed, if he possesses them.

Simplified discount

It is always good to stress that the individual can opt for the simplified discount, corresponding to the deduction of 20% of the amount of taxable income in the DIRPF limited to BRL 16,754.34.

However, the option for the simplified discount involves the substitution of all the deductions enrolled in the tax legislation.

Forms of preparation and filing

DIRPF is developed and transmitted through the use of:

a) the Statement Generator Program (PGD), for 2019, available at the RFB website, online (http://receita.economia.gov.br/); or b) the service "My Income Tax": (i) by the computer, made with digital certificate upon access to the "My Income Tax", available at the Virtual Service Center (e-CAC), at the RFB website; or (ii) by mobile devices, such as tablets and smartphones, by accessing the "My Income Tax" service available at Google Play or App Store stores.

Important: Before opting for the "My Income Tax" service, the individual must verify that he or she does not fall on some of the prohibition hypothesis listed in Article 5 of the Normative Instruction 1871.

Pre-filled Annual Adjustment Statement

Taxpayers may also use the Pre-filled Annual Adjustment Statement, provided that the individual filed with the 2018 DIRPF (calendar year 2017), and, as long as at importation of the file, the paying sources or leagal entities or equivalent have filed with the RFB their information for the calendar year 2018, through the Statement of Withholding Income Tax (Declaração do Imposto sobre a Renda Retido na Fonte - “Dirf”), Declaration of Medical and Health Services (Declaração de Serviços Médicos e de Saúde - “Dmed”), or Statement of Information on Real Estate Activities (Declaração de Informações sobre Atividades Imobiliárias - “Dimob”).

The Pre-Filled Annual Adjustment Statement file will be made available to the taxpayer (access by e-CAC using a digital certificate), and then imported into the actual statement, containing some information on income, deductions, assets and rights and debts and real charges. This kind of statement does not apply those who use "My Income Tax" service, through mobile devices.

The person must verify such information, as the taxpayer, who must provide changes, inclusions and exclusions of the required information, if any, is the responsible for the DIRPF.

Penalties

The penalty for filing the statement after the deadline is 1%, per calendar month or fraction of delay, issued by law and calculated on the IR due, with a minimum value of BRL 165.74, and a maximum of 20% of the tax due.

CPF requirement for all dependents

An important point to highlight in 2019 DIRPF is the requirement of the CPF information of for all dependents and feedings, as changes in the registration rules brought by NI RFB 1760/2017. In the last year's statement, filling in the CPF field for children from eight years old was mandatory. In turn, in 2019, the taxpayers can report as dependent or feeding, without a minimum age.

Complementary Information of Goods and Rights

Despite of the information provided by the Federal Revenue in 2018, the fields for the property complementary information, such as real estate (inform address, area, registry in notary office, IPTU number, among others), vehicles (inform the Renavan number) and investments (informing the CNPJ of investment funds, for example) will not be compulsory in this moment and therefore will not be obstacle to file the 2019 DIRPF.

Prepare your documents

Try to prepare the required documents, as being one of the first to file the DIRPF means a better chance of receiving the refunding in the firsts lots. In addition, if any documents are missing, you will have more time to be able to resolve any issues, avoiding leaving your statement to be sent near the deadline.

Find which documents are required in 2019 DIRPF preparation:

- Income reports for salaries, pro-labore, profit sharing, pensions, as well as financial institutions and respective bank statements as balances on Dec-31-2017 and Dec-31-2018;

- Receipts and invoices relating to health expenses (including monthly payments of health assistant);

- Proof of expenses with educational institutions;

- Proof of rents received and the paid;

- Proof of payments to private pension;

- Documents proving the sale or purchase of goods in 2018;

- Proof of payments for the provision of goods, such as vehicles and real estate in 2018;

- Control of purchase and sale of shares, with monthly calculation of tax due on operations;

- Darfs of paid Carnê-Leão;

- Proof of donations for tax incentive purposes (Rouanet Law, Audiovisuals, Child and Adolescent Funds);

- Undertaken debt documents in 2018;

- All the documents above regarding dependents (expenses, income, purchases and sales, etc.).

Remember to inform the CPF number of the dependents and all feeding (when applicable). And also remember that all dependents’ expenses and income must be in the statement.