Do you have fixed income securities, such as CDBs, LCAs, LCIs, CRAs, CRIs, debentures or government bonds in Treasury Direct? Stay tuned for changes in Income Tax 2022 when reporting these investments. The Federal Revenue made changes to the “Assets and Rights” form, with the creation of “groups” and new “codes” for investments.
As a result, some investments gained their own group, such as investment funds and cryptocurrencies, which are now declared separately from other products. The codes where fixed income securities were reported also changed. The problem is that most banks and brokers have not updated the income report with the new codes, which can create confusion for the taxpayer when filling out the return.
See in this article what has changed for fixed income securities over the past year, as well as explanations on how to declare the balances and income of these investments. If you are looking for specific information on how to declare savings, click here.
Get the earnings report from the bank or broker
The first step to declare investments in IR 2022 is to get the financial income report from the bank or brokerage where you keep the applications. This document contains all the information about your investments. Without it, it is not possible to complete the declaration.
Usually, the report is available on the bank’s or broker’s website or application for you to download on your computer or cell phone. If you have trouble finding the document, ask your manager or your institution’s customer service for help.
If you have an account with more than one bank or have invested in more than one brokerage firm, you will need to get reports from all these financial institutions.
Don’t Forget Dependent Investments
Also get income statements from investments made by your dependents and your spouse, in case the two of you are filing together.
Understand the data in the earnings report
There is no standard financial income reporting template. Basically, the document is divided into three parts, which correspond to the declaration sheets where the information must be inserted:
Exempt incomeIncome subject to exclusive taxationAssets and rights
If you are not sure which form to put your investment income on, follow exactly what is in the bank or brokerage report.
Investments always appear in the report separated into “exempt income” and “income subject to exclusive taxation”, as in the image below.
How to declare CDBs and Treasury Direct income
Treasury Direct bonds and some private bonds, such as CDBs, RDBs and LCs, are taxed directly at source. That is, the bank or brokerage deducts the Income Tax at the time of redemption of the security.
For this reason, the income from these investments must be declared in the “Income Subject to Exclusive/Definitive Taxation” form of the Income Tax return.
Only securities that are tax-exempt, such as LCAs, LCIs, CRAs, CRIs and incentivized debentures, must have their income declared in another form of the declaration, of “Exempt Income”, as will be explained further below.
If you are in doubt as to whether the security you invest is subject to exclusive taxation or is exempt, please follow the information exactly as it appears in the report provided by the bank or brokerage firm.
When declaring income, there is no need to separate them by title. Just enter the total income subject to exclusive taxation that you have at the same bank or brokerage.
Locate the “Income Subject to Exclusive/Definitive Taxation” tab in the menu on the left side of the 2022 Income Tax filling program screen.
Click “New”. Then, choose the “Type of Income” by the code “06 – Income from financial investments”.
Indicate who made the investment, whether you or your dependent. If you both have investments, open a card for each.
Inform the name and CNPJ of the paying source, which is the bank or brokerage company where you made the application. It doesn’t matter if it was in a CDB of another bank or in a public bond of the Direct Treasury.
If you have applications in more than one bank or brokerage, open a file for each institution.
In the “Value” field, enter the total net income (already deducted from income tax), exactly as stated in the report presented by the bank.
Pay attention if the expression “net income” appears in the report. Some institutions report two values, the “gross income” and the “withheld tax”. In that case, you need to do the math (gross income minus withholding tax) to find out the net income.
How to report yields on bonds that are exempt
Some fixed-income securities, such as LCI, LCA, CRA, and CRI, have yields that are tax-exempt.
To declare these incomes, locate the “Exempt and Non-Taxable Income” form on the menu on the left side of the IR 2022 filling program screen. Click on “New”.
In “Type of Income” select the code “12 – Income from savings accounts, mortgage bills, agribusiness and real estate letters of credit (LCA and LCI) and agribusiness and real estate receivables certificates (CRA and CRI)”.
Then indicate who made the investment, whether you or a dependent. Inform the name and CNPJ of the paying source, which is the bank or brokerage company where you purchased the security.
In the “amount” field, enter the total exempt income received in 2021 through that bank or brokerage. It is not necessary to report the yields of each security separately.
To finish filling in the form, click on “OK”.
If you have applications in more than one bank, open a form for each institution and repeat the entire procedure described above.
The same goes for investments on behalf of dependents. Open a card for each person and each bank.
See what has changed in the “Assets and Rights” sheet
Unlike the two previous forms, where it was sufficient to inform the total income that was exempt or taxed at source, in the “Assets and Rights” form you will have to detail the investments one by one, in addition to informing the balances on 12/31/2020 and in 12/31/2021.
The IRS made changes to the “Goods and Rights” form this year, with the creation of “groups” and new “codes”. As a result, fixed income securities gained their own group and two new codes. The old codes where they were entered have changed.
The problem is that most banks and brokers have not released the income report with the new codes, which can create confusion for the taxpayer when filling out the declaration.
If you have already done the Income Tax last year and managed to import the 2021 declaration into the IR 2022 program, your investment information will automatically appear on this form.
It is important to check that fixed income securities appear with the correct “group” and “code”, as will be explained below.
If you have not made a declaration in the last year or were unable to import the declaration file, follow the steps below. These guidelines also apply to those who made new investments in 2021.
Open the “Assets and Rights” tab and click on “New”.
As of this year’s declaration, fixed income securities must be declared in “group 04 – applications and investments”.
The choice of “code” depends on the characteristics of the title. The Federal Revenue created two codes to inform fixed income papers:
02 – Public and private bonds subject to taxation (Direct Treasury, CDB, RDB and Others) 03 – Tax-exempt bonds (LCI, LCA, CRI, CRA, LIG, Infrastructure Debentures and others)
After filling in the “group” and the “code” corresponding to the security, inform if the investment is yours (holder) or one of the dependents. Then choose the “105-Brasil” location for investments made in the country.
Be careful when filling in the “CNPJ” field. If the investment is a public security purchased at Tesouro Direto, inform the CNPJ of the bank or brokerage company where you made the purchase.
For CDBs, LCIs or LCAs, inform the CNPJ of the issuing bank of this private security. In the case of debentures, inform the CNPJ of the company that issued the paper. The issuer’s CNPJ information must be included in the earnings report provided by the bank or brokerage firm.
In the “Discrimination” field, describe the application. If it is a Treasury Direct bond, inform the type, maturity date, amount and the name of the bank or brokerage company where the purchase was made.
For CDBs, LCIs and LCAs, enter the name of the issuing bank, the paper rate and the maturity date. Likewise, for debentures, inform the name of the issuing company, characteristics of the security and maturity.
In the “Status on 12/31/2020” and “Situation on 12/31/2021” fields, put exactly the values in the income report provided by the bank.
Do not update the value of government bonds based on the market price. The correct thing is to maintain the acquisition value of the papers.
If you have sold government bonds, redeemed CDBs or other securities, enter zero in the balance in 2021. If the sale or redemption was partial, enter the amount exactly as it appears in the report provided by the bank or brokerage firm.
For new investments made in 2021, put zero in the 2020 balance and the amount applied in the 2021 balance. If you just increased an existing investment, put the 2020 and 2021 values exactly as they are in the income report.
Click “OK” to complete filling the form. Repeat the above procedure for each title to be declared.