Important issues about 2018 Dirf

The 2017 Withholding Income Tax and the special situations occurred in 2018 (2018 Dirf), established by the Normative Instruction RFB 1,757/2017 and with the layout approved by the Cofis Executive Declaratory Act 72/2017, already needs to be on the individuals and companies radar.

Filing Deadline

2018 Dirf should be exclusively filed online, until 23:59:59 (GMT) on Feb-28-2018, by Receitanet program (available at RFB website), noting that the statement should be signed through a valid digital certificate (except for legal entities opting for Simples National).

For cases of termination by liquidation, merger, or split-up occurred in 2018, the extinct legal entity shall file Dirf on this calendar year until the last business day of the month following the event. If it occurs in January 2018, Dirf may be filed until Mar-29-2018.

In case of definitive exit from Brazil or estate foreclosure occurred during 2018, the 2018 Dirf from individual payer source related to that calendar year shall be filed:

a) definitive exiting:

- until the departure date on a permanent basis; or

- within 30 days from the date on which the reporting individual completes twelve consecutive months of absence, if the exit is in temporary basis; and

b) estate foreclosure, until the last business day of the month following the event occurrence. If the event occurs in January 2018, the Dirf may be filed until Mar-29-2018.

Compulsory requirement

Those required to file the 2018 Dirf, among others, are:

- legal entities and individuals who have paid or credited earnings on which have levied Withheld Income Tax;

- legal entities who withheld the Social Contribution on Net Income, COFINS and PIS/PASEP on payments made to other private law legal entities; and

- direct federal public administration agencies, municipalities and federal public administration foundations, public companies, mixed capital companies and other entities whose voting is subject to capital stock, the Union holding, directly or indirectly, the majority of capital stock, and receive funds from the National Treasury and are required to register their budget and financial execution at Siafi - Integrated System of Federal Government Financial Administration with IR withholding information and contributions made on payments to legal entities in suppling goods or services.

Penalty

Taxpayers who fail in filing Dirf within the prescribed period shall be subject to a 2% penalty in the calendar month or fraction, on taxes and contributions amount reported in the statement, even if fully paid, limited to 20%.

For applying penalty, the day following the end of the originally set period to file the statement shall be considered the initial term and the actual filing date or, in case of non-presentation, at issuance of violation notice is considered final term.

Minimum values: minimum penalty for individuals, legal entities, and inactive companies opting for Simples National is BRL200.00. In other cases, the minimum value is BRL 500.00.

Decrease in penalty

The penalty should be decreased:

a) 50%, when the statement is filed after the deadline, but before any legal procedure;
b) 25%, if the statement is filed within the period prescribed on summons.