Investment Tax

Income tax on investments: understand what their impacts are

capital gain tax rate

investment income tax

investment income tax

A significant proportion of investors do not pay the necessary attention to the effects of income tax on investments. This can cause them to be surprised by extra expenses, which detract from their income.

Even if some applications are exempt from the payment of Income Tax (IR), Brazilian law still requires that they be declared, being an obligation to remain regular. Keep reading this content to find out how this tax will impact your investments!

The impacts of income tax on investments

The IR is applied when the investor withdraws the applied amount, however, it is important to know that the individual does not pay the tax on the entire investment amount, but only on the profits (income) obtained.

According to IN RFB No. 1,585 / 15, the rates are regressive (decrease) according to the period of time that the investment remains applied. However, there are differences for short-term and long-term investments.

Investments classified as short-term will have the following table of IR rates:

  • applications of up to 180 days: 22.5%;
  • applications with more than 180 days: 20%.

Long-term investments will follow the following table:

  • up to 180 days: 22.5%;
  • between 181 and 360 days: 20%;
  • between 361 and 720 of: 17.5%;
  • more than 720 days: 15%.

Finally, it is important to know the investments exempt from income tax:

  • Savings account;
  • letter of real estate credit (LCI);
  • agribusiness letter of credit (LCA);
  • certificates of real estate receivables (CRI);
  • agribusiness receivables certificates (CRA);
  • purchase and sale of property within 180 days – article 39 of Law No. 11,196 / 05 ;
  • real estate investment funds (FII);
  • incentive debentures – those issued by Brazilian companies that contribute to infrastructure in the country, such as the construction of airports, roads, etc.

How to declare income tax investments

When carrying out the Individual Income Tax Declaration (DIRPF), the investor must look for the form called “Goods and Rights ” in the DIRPF program downloaded from the Federal Revenue website .

Within this tab, select the appropriate code according to the type of investment made. In the topics below we show how to declare the main types of investments.

Investments that focus on IR

If you invested in Treasury Direct, CDB, RDB, Debentures or LCs, select the code “45 – Fixed Income Investment ”.

Inform the balance of the investment in the year to be calculated, the CNPJ of the bank or broker, the beneficiary of the security and other information requested. Finally, put the earnings in the “Income Subject to Taxation” tab and choose the code “06 – Income from financial investments”.

The types of funds are between codes 71 and 74 of the program, with 79 being for other funds. It is also necessary to list the balance (according to the Income Report), fund data, administrator’s CNPJ and other requested information.

Exempt investment

For exempt investments – such as LCI, LCA, CRI, CRA and FII – check the option “Exempt and Non-Taxable Income” and choose the code “45 – Fixed Income Application”. Enter the investment and financial institution data. It is emphasized that it is necessary to make a declaration for each investment.

Properties

It is not necessary to declare properties with a value of less than R $ 300 thousand. If this limit has been reached, we have an article that explains how to make the declaration of the property tax.

Savings

In the case of savings, select the code “41 – Savings Account”, enter the savings balance and bank information.

The possibility of obtaining IR benefits

The advantages of IR are long-term investments or investments that are exempt from legislation. Good alternatives are those related to real estate, such as FIIs and Incentive Debentures, as they tend to have higher yields than the others.

However, another type of investment that generates high returns is the acquisition of real estate (apartments, houses and other types of housing). It is a safe investment whose assets tend to increase significantly over time and, in some cases, are exempt from income tax.

Even if Brazil has a high tax burden, this cannot be a factor that hinders its financial investments. It is fully possible to receive good income, even if income tax is levied on investments.

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