Income Taxpayers are subject to file the Annual Tax Return
Part of the repair actions managed by the Renova Foundation consists of indemnity and other compensation payments. These amounts, if they fall within the prerequisites of the Federal Revenue Service, should be included in the Annual Tax Return.
Those who has been indemnified and/or received financial aid from the Renova Foundation in 2017 comply with the following criteria:
- Obtained a taxable income greater than R$ 28,559.70 in 2017
- In 2017, received amounts greater than R$ 40 thousand that were not taxed directly at the source that made the payment;
- Is to file the declaration even though he or she does not meet the above requirements
More clarifying information about the obligations can be found on the Federal Revenue Service website.
The indemnities for material and moral damages are intended to compensate those affected for lost assets and are not taxable. The same applies to the financial aid, which is also considered a non-taxable income. The affected person who has received any of these compensations will receive a document called Payment Report indicating the paid indemnity amounts. These payments should be included in the “Exempt and Non-Taxable Income” form.
Whereas the Loss of Profit is an indemnity payment provided to restore a lost income, that is, that the person no longer receives. This type of compensation is considered taxable by the Federal Revenue Service, which means that the person who received it must include these amounts in the “Taxable Income Received from Legal Entity” form.
Since the Renova Foundation pays the indemnities, in some cases it is obliged to withhold the tax at the source, passing on to the Federal Revenue Service the amount withheld from the indemnity portion paid as loss of profit. In these cases, Renova is sending out a document called the Income Report, which will include the total amount paid and the tax withheld.
All those declaring Income Tax and that received payments from the Renova Foundation in 2017 should clarify whether the money was received by the person who is declaring or by a dependent and inform the CNPJ of the Renova Foundation (25.135.507/0001-83) as well as explain that the compensation was received due to the Fundao dam collapse. If the person reporting the tax received any other payment from Renova or another paying source, those amounts should be filed separately.
To facilitate your tax return, the Renova Foundation has prepared a booklet with some basic information. Access the link to clarify your doubts.