Main Aspects of Law No. 14,973/2024 for Individuals
Voluntary Disclosure of Currency and Tax Assets (鈥淩ERCT-Geral鈥�)
The 鈥淩ERCT-Geral鈥� applies to Brazilians and foreign nationals who are tax resident in Brazil on December 31, 2023 (even if they are not resident in 2024), who have been or are owners of assets and rights on December 31, 2023 or before, and who have not declared those to the tax authorities, or have declared them with some omissions or incorrect data, and plan to voluntarily disclose them.
The procedures and conditions for adherence were determined through Federal Revenue Normative Instruction No. 2,221/2024虏, which includes:
- 聽submission of the 鈥淒ercat 鈥� Declara莽茫o de Regulariza莽茫o Cambial e Tribut谩ria鈥� (Declaration of Exchange and Tax Regularization), via the individual鈥檚 Brazilian Federal Revenue online portal (鈥淧ortal eCAC鈥�), from September 23, 2024 until December 15, 2024;
- payment of the applicable taxes at a fixed rate of 15% (fifteen percent) by December 15, 2024 鈥� for foreign assets, the taxable basis should be calculated considering the official exchange rate for December 31, 2023, from the Central Bank of Brazil;
- payment of the 100% (one-hundred percent) penalty on the assessed tax, as per above, by December 15, 2024.
Real Estate Properties Value Update
Law No. 14,973/2024 also allows individuals to update the value of their real estate properties reported in their 2024-2023 Brazil Annual Individual Income Tax Return, by paying a fixed rate of 4% (four percent) on the calculated capital gain, by December 16, 2024.
Individuals electing for this update should file the 鈥淒eclara莽茫o de Op莽茫o pela Atualiza莽茫o de Bens Im贸veis 鈥� Dabim鈥� (Declaration of Option to Update Real Estate Assets), via their Portal eCAC , from September 24, 2024 until December 16, 2024. 聽Then, the updated value must be reported in their 2025-2024 Brazil Annual Individual Income Tax Return, by May 30, 2025.
The Federal Revenue Normative Instruction No. 2,222/20243 provides for the possibility of updating the following real estate properties:
- In Brazil.
- Abroad.
- That form part of the assets of a controlled entity abroad where the individual has opted for the tax transparency regime.
- That are part of the assets of a foreign trust (one established abroad) whose trustee is obliged to declare the assets and rights of the trust in his/her tax return.
The update cannot be made to real estate properties which were not reported in the individual鈥檚 2024-2023 Brazil Individual Income Tax Return (unless the individual was not eligible for one), to properties acquired in 2024, nor to properties sold prior to the date this update election was formally made.
If the updated property is sold before 15 (fifteen) years have passed as from its update, the calculation of the capital gain tax will be adjusted in proportion to the time elapsed since the update. 聽The percentage starts at 0% (zero percent) for disposals occurring within 36 (thirty six) months and gradually increases to 100% (one-hundred percent) after 180 (one-hundred eighty) months.
