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Individual Taxes in Brazil

«Taxes in Brazil
«Income Tax

Brazilian taxpayers must pay (advance) income tax monthly, but the total income tax due is calculate in an yearly basis.

Because of this, it is necessary that all taxpayers make an yearly adjustment.
An example to make it clearer: if a taxpayer has an income of R$ 10,000 in January, he will have to pay income tax that month (in case of salary people, the tax will be paid directly by the source); if the taxpayer doesn't have any other income during the remaining of the year, then he will be exempt of income tax that year; so, an adjustment must be made to reflect the fact that he shouldn't have paid any tax that year (in the example case, the taxpayer will receive a tax refund equal to the amount paid in January).

This declaration is called Income Tax Yearly Adjustment Declaration (Declaração de Ajuste Anual de Imposto de Renda).
The declaration must be presented until the last day of April of each year, with regards to the income of the previous year.
The Declaration may result in a tax to be paid, tax to refund, or zero balance.
The declaration will be audited by Receita Federal; in case Receita finds anything suspicious, the declaration will fall into a so called Tax Net (in Portuguese, Malha Fiscal).

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