The Brazilian Revenue Service (Receita Federal) has a procedure to refund taxpayers who paid more income tax than they should have in the previous year. For 2021, the refund process started last May 31 and will continue until September 30.

During the year, individual taxpayers generally pay their income tax on a monthly basis at rates up to 27.5%. Depending on the case, the income tax will either be paid directly by the taxpayer or withheld by their employer.

However, some deductible expenses, such as medical and educational costs, aren’t considered at the time that taxes are paid. Therefore, the taxpayer ends up paying more since the respective discounts weren’t part of the initial income tax calculation.

This discrepancy is resolved through the annual tax return declaration. In fact, that’s why its official name is Annual Adjustment Declaration. After all income and deductible expenses of the prior year are entered, the system calculates the effective tax rate and displays whether there’s a refund or an additional payment still owed.

In the case of a refund, the easiest thing to do is to insert your bank account information in the annual tax return declaration. Your bank’s name and branch number as well as your account type and number will be required. Then, it’s just waiting for the credit according to the refund schedule.

You can check the status of your refund by clicking HERE.

In Brazil, filing taxes properly is important not only from a compliance perspective, but also because it can give you some cash back.