Last Friday, 25th, the second phase of the Tax Reform was presented by the Minister of Economy, Paulo Guedea, and the President of the Chamber of Deputies, Arthur Lira. The project deals with the Tax Reform for Individuals, Companies and Investments.
According to the Federal Government, the change will bring simplification and lower costs, reduce misrepresentations and end privileges without impacting the government.
According to the information from the Federal Government’s website, the main goals of the Reform are:
- Simplification and lower costs;
- Legal Security and Transparency;
- Reduction of misrepresentation and end to privileges;
- Preservation of global tax burden;
- Fight evasion;
- Impartiality in economic decisions;

More investments and jobs
The proposal updates the exemptions for Individual Income Tax. Today, those who make up to R$ 1900 are exempt; with the reform, the exemption would apply to those who have a monthly salary of up to R$ 2500. The Economy Ministry informed us that the number of Brazilians who will not pay income tax will increase from 10.8 million to 16 million, a 31% increase in the bracket of the exempt.
Another significant change concerns those who have a rate of 27.5%; today this rate is applied to those who have a salary starting at R$ 4,664.68, with the reform the rate who be applied to those who make more than R$ 5,300.1.
It will be possible to update property values.
The proposal will allow Income Taxpayers to update their property values. Today, real estate is held at its original value at declaration, and when selling the property, the individual must pay between 15% and 22.5% capital gain tax.
Updating the value of estates will also be allowed, where the amount will be subject to 5% of the tax in relation to the difference in the update. This will make the taxpayer pay less taxes when selling assets.
Changes in IRPJ
With respect to changes in Corporate Income Tax (IRPJ), the general rate will be reduced from 15% to 12.5% in 2022, and to 10% in 2023. The additional 10% for profits above R$ 20 thousand per month will be maintained.
The window for payment of IRPJ and Social Contribution on Net Income (CSLL) have also been changed, which is now quarterly, ending the annual option.
Written by Marcos Ferreira, content assistant at Drummond Advisors
Share
Let's talk?
Related news

New Fast-Track Request Processing for Letter Rulings regarding Corporate Reorganizations and Tax-Free Spin-Offs
The new Revenue Procedure 2022-10, released by the IRS on January 14, 2022, has established an 18-month pilot program that allows for fast-track processing of certain requests for private letter rulings. The program is expected to expire on July 14,

Tax Compliance in Brazil: Electronic Declaratory Registry (RDE)
The submission of the Electronic Declaratory Registry (RDE) in the Direct Foreign Investment (IED) module is among the first requirements of the year. Check out additional information below. What is it? The Electronic Declaratory Registry (RDE) in the Direct Foreign

IN provides for Income Paid and Withholding Income Tax Statement
The Normative Instruction (IN) of the Federal Revenue No. 2060/2021, which will come into force on January 1, 2022, comprises the Income Paid and Withholding Income Tax Statement. Regarding the Income Statement, the IN informs that “the individual or legal

Taxpayers are released from paying tax on the Selic rate
Lower court judges have accepted requests for the review of statements and are releasing taxpayers from paying taxes on the Selic rate. The restatement by the Selic rate involves R$ 65 billion. According to an article published by Valor Econômico,

RFB publishes Answer to Advance Tax Ruling Request, maintaining the segregation of the taxation of software as goods or services
It was published by the Taxation Division (“DISIT”) of the Federal Revenue Service (“RFB”) to DISIT Answer to Advance Tax Ruling Request (“SC DISIT”) no. 4.028, in answer to challenge by taxpayer that operates in the cars resale management software

Federal Revenue Service determines that marketplace should only pay taxes on commissions paid by shop owner
The Federal Revenue Service issued a positive guidance for companies that intermediate online product sales through marketplace platforms as it analyzed a company’s inquiry regarding the inclusion, in its gross revenue, of amounts received from buyers but which are passed

Federal Revenue Service issues understanding on the non-taxation of allocation of expenses
The taxation of lack thereof of expenses and costs shared by companies of the same corporate group has been long discussed in Brazil. The latest Federal Revenue Service statements on the issue occurred (i) in 2012, through the issuance of

Taxa Selic sofre mais um aumento e atinge 6,25% ao ano
O Comitê de Política Monetária (Copom) anunciou o aumento da taxa Selic em 1%, saltando de 5,25% para 6,25% pontos, o maior nível desde julho de 2019. É a quinta vez que a taxa sofre aumento no ano de 2021.

Taxa Selic sofre novo aumento, dessa vez de 4,25% para 5,25% ao ano
O Comitê de Política Monetária (Copom) anunciou o aumento da taxa Selic em 1%, tendo um salto de 4,25 para 5,25 pontos percentuais. Após o Copom, o mercado financeiro está projetando que a taxa possa chegar até 7,50% em dezembro

Federal Revenue Service publishes new Income Tax position on positive exchange variation on deposits in accounts abroad
Starting on the 1st of July 2021, all fiscal auditors for Brazil’s Federal Revenue (“RFB”) began to follow the new position set out in COSIT Consultation Solution No. 115/2021 (“SC”) regarding the exemption from Income Tax (“IR”) on gains arising

Updates of the Week – Tax Reform in Brazil: Quota-eaters and Closed Funds
Bruno Drummond comments on the impact of annual quota-eaters Check out the complete audio of the interview on our Podcast (in Portuguese): On the second episode of the “Updates of the Week” series, Bruno Drummond, partner and founder of Drummond

Text on profit taxation will be analysed by CARF
The Administrative Council of Tax Resources (Carf) will receive 45 texts for analysis in August. Among these, two summary proposals stand out, the first being on the taxation of profits in Brazil, despite the existence of an international treaty that