Alana Dahrouj
Lawyer at Marcos Martins Advogados
The Minister of the Economy sent the second phase of the Tax Reform Bill to the Chamber of Deputies on the 25th, which deals with some changes to the collection of Individual Income Tax (IRPF).
The Bill provides for three changes to the current form of IRPF collection: Updating the tax table; Updating the value of real estate and Taxation of profits/dividends, which are:
Updating the IRPF table: There is a shift in the tax brackets. Taxpayers earning up to R$1,903.98 are currently exempt from the tax bracket, but with the update the exemption is extended to those earning up to R$2,500.
The updated table benefits all taxpayers: there is a 31% increase in the number of exempt taxpayers and the shift in the bands means that the highest rate (27.5%) will now apply to taxpayers who receive salaries of R$5,300.01 or more, whereas the band currently applies to salaries above R$4,664.68.
Updating the value of real estate: currently, when selling real estate, the taxpayer has to pay between 15% and 22.5% tax on the capital gain, and in the tax return, the real estate is kept at its original value. With the Reform, it will be possible to update the property values, with 5% tax being levied on the difference.
Taxation of profits/dividends: Currently, profits and dividends received from shareholdings in companies are exempt; the Reform provides for tax at a rate of 20%.
Marcos Martins Advogados makes its tax team available for further clarification on this subject.
