Government opens deadline until November for Brazilians to update resources abroad with lower taxation

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Measure was included in the MP that extended exemption from Income Tax. Objective is to anticipate tax collection; as of December, the process will be subject to higher taxation. The government opened a program to allow Brazilians to update asset values ​​abroad, paying less Income Tax on capital gains. The procedure is foreseen in the provisional measure, published on Sunday night (30), which extended the income tax exemption for those who earn up to R$ 2,640. According to the rules, the individual residing in the country may choose to update the value of assets and rights abroad informed in the annual adjustment statement, to the market value on December 31, 2022. The taxpayer will have to pay the tax related to the difference to the acquisition cost, by the Individuals Income Tax, with a final rate of 10%. The tax must be paid by November 30. The option applies to: financial investments; real estate in general or assets that represent rights over real estate; vehicles, aircraft, vessels and other movable property subject to registration in general, even if in fiduciary alienation; holdings in controlled entities. The 10% levy is an option. Taxpayers who do not wish to update the value of assets abroad, with a cut-off date at the end of 2022, will be subject, as of this year (due to the principle of precedence), to the following rates: 0% on the annual portion of income that does not exceed R$ 6 thousand; 15% (fifteen percent) on the annual portion of income that exceeds R$ 6 thousand and does not exceed R$ 50 thousand; 22.5% on the annual portion of income that exceeds R$50,000. According to interlocutors from the Ministry of Finance, the expectation of collection, with the measure, is R$ 3.2 billion this year. Previous process Federal Revenue adds new rules to the law that allows the repatriation of resources A similar procedure had already been adopted in 2016, when the government collected R$ 50.9 billion to regularize assets of Brazilians who were in other countries. At that time, when 25,011 individual taxpayers and 103 companies joined the program, the rate was 15%, and a fine of another 15% was also charged. Increase in revenue The Minister of Finance, Fernando Haddad, had already anticipated that a new process similar to the regularization of assets abroad should be opened by the Brazilian government. Since the beginning of the year, the government has been committed to increasing fundraising to rebalance public accounts and enable a faster cut in the economy’s basic interest rate, the Selic, currently at 13.75% per year – the highest level in more than six years. To pursue the fiscal targets contained in the fiscal framework proposal, Minister Haddad has already informed that he seeks to increase government revenue by an amount between R$ 110 billion and R$ 150 billion, to enable the targets contained in the fiscal framework proposal. A survey carried out by economists at the Warren Rena brokerage indicates the need for at least R$ 254 billion in revenue growth, by 2026, to reach the baseline of the primary result targets of the new fiscal rule presented by the economic team. In the proposal, the government foresees zeroing the deficit in public accounts from 2024, and obtaining positive balances in 2025 and 20126. The National Treasury has already admitted that the new fiscal rule contemplates an increase in the public debt, which may be above 80% in 2026, but with stabilization of the indicator – which is closely monitored by foreign investors. This week, the president of the Central Bank, Roberto Campos Neto, who has been criticized by President Lula because of the current level of the Selic, stated that the interest rate is high in Brazil due to the current level of indebtedness – considered high for the pattern of emerging countries. “In terms of interest, we cannot confuse cause and effect. The debt is not high because the interest is high. It’s the opposite, the interest is high because the debt is high. When you, in debt, go to the bank, and the bank makes an analysis that you are indebted and do not pay the debt, the interest is high”, declared Campos Neto.

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