End of Dirf: What Changes for Companies

The end of the annual declaration marks the beginning of a new phase, with the submission of monthly information via eSocial and EFD-Reinf.

The Federal Revenue Service, through Regulatory Instruction 2,181/2024, announced the extinction of the Declaration of Income Tax at Source (Dirf) as of January 1, 2025. According to the agency, this change aims to modernize the tax system. In practice, companies must be aware of the impacts.
Dirf’s main function is to report tax withholdings at source on payments made to third parties. It must be submitted by the paying entity, meaning those who make payments and withhold income tax at source.
So, what does this mean for companies from now on? Below are key points to understand.

Last Dirf

The end has been announced, but companies still need to fulfill their obligation regarding the 2024 calendar year. Therefore, the last Dirf must be submitted by February 28, 2025.

What must be reported

In general terms, the Dirf consists of information such as:

• Income paid to individuals domiciled in the country;
• Income tax and contributions withheld at source on income paid or credited to beneficiaries;
• Payment, credit, delivery, employment, or remittance to residents or domiciled persons abroad;
• Payments to corporate group health care plans.

How will information reporting work with the end of Dirf?

Information such as the items listed above, related to taxable events occurring from January 1, 2025, onward, will be reported exclusively through the eSocial and EFD-Reinf platforms, both of which have a monthly reporting requirement. In other words, the end of Dirf marks the elimination of this annual obligation, while the submission of data related to withholdings will continue on a monthly basis.

Data previously entered in the Dirf will be validated using the R-4000 family of EFD-Reinf and from the S-1.3 version of eSocial.

How to adapt to the requirements

It is expected that fulfilling the main obligation closer to the submission of the ancillary obligation on a monthly basis will facilitate oversight, enabling immediate cross-checks within the Sped environment.
This situation requires attention from employers, who, in addition to planning for the final submission of the Dirf, must also ensure the monthly reporting of 2025 data. This necessitates aligning the efforts of the responsible teams to keep up with an increasingly dynamic routine.
Combining technology with compliance is essential. In this regard, tax intelligence software is indispensable for tax management processes. Therefore, adapting systems to the new information submission models is also a challenge to be addressed.

Tax obligations in compliance

Domingues e Pinho Contadores has a specialized team to help with compliance, adapting and parameterizing systems, ensuring that clients are fully compliant. Count on this complete support: dpc@dpc.com.br.