Know how to declare shares and dividends from abroad in the Income Tax

The taxpayer who has shares abroad and received dividends for them must inform the investments to the Federal Revenue in the Income Tax return. Anyone who fails to declare these applications can fall into the fine mesh and pay a fine.

The deadline to declare the IR 2022 ends on the 31st of this month. Until 4 pm on Friday (6), the IRS had received 19.8 million statements from the expected 34.1 million. Citizens who invest in Stock Exchanges are required to declare the tax. If they do not do so within the deadline, there is a minimum fine of R$ 165.74, which can reach 20% of the tax due in the year.

According to David Soares, a specialist consultant on Income Tax at the IOB, anyone who invests in shares abroad through a national brokerage firm receives the brokerage invoice, which is the income report for this type of operation.

With this document in hand, it is easier to fill out the declaration. However, if the operation was carried out directly with a company abroad, the income report is not always provided, as the rule that obliges companies to deliver this type of document is law in Brazil and may be different abroad.

Richard Domingos, executive director of Confirp Accounting, says that there are other differences between declaring bought and sold shares in Brazil or abroad, with different rules and forms. Some tax advantages that the tax authorities give to domestic operations are not guaranteed when the gain occurs abroad.

“The variable income form where you enter the gains in variable income with shares in the spot market only applies to operations carried out here in Brazil. If you operate with shares abroad, the rules do not apply to income that the shares originate abroad. “, he says.

Another issue that the taxpayer should pay close attention to is that the tax paid abroad does not correspond to and does not compensate for the IR that must be paid in here. It is also not possible to offset losses with stock sales.

How to declare shares from abroad:

1. The amount of shares in goes on the “Assets of Rights” sheet; open a tab under “New” for the total shares of each company
2. Choose the group “03 – Equity interests” and the code “01 – Shares (including those listed on stock exchanges)”
3. You must inform the country where you made the investment in 2021
4. When the location changes and the country of application is no longer Brazil, the taxpayer no longer needs to inform the company’s CNPJ
5. The most important field is “Discrimination”, in which the taxpayer must inform the number of shares purchased, which company it is from and the price paid; Then, you also need to inform their value in US dollars.
6. In “Goods and Rights”, the good must always be declared at the purchase price, without additions, even if there is an appreciation
7. If you bought shares in 2021 and didn’t have them in 2020, the 12/31/2020 field will be blank; if you sold shares in 2021, the “Status on 12/31/2021” field will be reset to write off the asset
8. In situations at the end of each year, the amount to be filled in corresponds to the price in US dollars converted into reais, according to the selling price of the dollar defined by the Central Bank of Brazil on the date of acquisition.

How is the IR payment on the sale?

The profit obtained from the sale of shares abroad that total up to R$ 35 thousand is exempt and must be informed in the “Exempt and non-taxable income” form, in line “05 – Capital gain on the sale of an asset, right or set of assets or rights of the same nature, sold in the same month, with a total disposal value of up to R$ 20,000.00, for shares sold on the over-the-counter market, and R$ 35,000.00, in other cases”.

The rule applies to trades carried out within the same month and covers the total of financial operations of the same nature, says Domingos, from Confirp. For sales of greater value, the profit is taxed and the capital gain on it must have been calculated at the time of disposal, through the Gcap 2021 program.

Tax lawyer Renata Leal Ferrarezi also says that the taxpayer should not confuse actions in Brazil with those abroad. In the exempt income form, there is line 20, “where the profit or loss obtained on the sale of shares in Brazil, not for investments abroad”, she says.

You must have filled in all the details of Gcap. In the “Specification” form, for example, the taxpayer must inform the company from which he acquired the shares and the date of purchase, in addition to informing whether he purchased with income in national or foreign currency or in both currencies.

When answering this question, several fields will open to inform you how much you paid. The acquisition cost must always be in US dollars, converted into reais on the date of purchase. The tax will be calculated, which must be paid by the last day of the month following the operation.

“It is important to make this calculation and fill in the data in Gcap in the month of the sale to determine the tax due. You should not leave it to do this only in the delivery of the declaration”, says Soares.

where to declare

For exempt income, the form to be filled in is “Exempt and Non-Taxable Income”, in line 05. When there is taxation, it is necessary to import the data from the Gcap program to the “Capital Gain” form of the declaration, from the left side. Choose the option “Shareholdings” and click “Import”.

When importing the data from Gcap 2021, the tax paid on the income will go to the “Income Subject to Exclusive/Definitive Taxation” tab. “This tax you paid is definitive and nothing more will be charged in this year’s declaration”, explains Soares.

Fine can reach 150%

The entire purchase and sale of shares abroad must be declared in the month in which it takes place, through Gcap. For international operations, there is no right to offset losses. If you have not completed the capital gain program and paid the tax, there is a fine on the income tax return.

The fine is 0.33% per day of delay, limited to 20%. Interest is charged based on the basic interest rate, the Selic, calculated from the month following the due date plus 1% interest in the month of payment.

If you fail to declare and fall into the fine mesh, the fine can be much higher and reach 150%, according to David Soares, from IOB. This penalty occurs when the IRS opens a procedure to determine what happened and the taxpayer cannot prove that he does not have to pay the tax. “You need to anticipate and pay the tax at the right time.”

For dividends received from abroad

According to Soares, the dividends you receive in Brazil for the shares are exempt from Income Tax, but the dividends on shares abroad are taxed by the Carnê-leão. The income received must be informed in the declaration, in the form “Taxable Income Received from PF/Exterior”.

Carne-leão is paid every time the investor receives dividends. The deadline for paying the tax due is until the last day of the month following receipt. “Profits and dividends received from companies domiciled abroad are subject to the mandatory monthly payment by Carnê-leão, observing the agreements and treaties signed between Brazil and the country of origin of the income”, says Sandro Rodrigues, accounting economist and founder of Attend Advisory, Consulting and Auditing.

When making the IR declaration, simply import this data into the “Taxable Income Received from Individuals/Foreign” form. In this form, it is necessary to declare, in the “Other information” tab, the amounts received month by month. The total goes in the “Outside” column. There is, below, the button “Import Data from Carne-leão”. In this case, just import and check if the data is correct. Do not forget to inform the PIS number requested by the program.