2023 Dirf: filings must be made by February 28

Obligation is set to be abolished, but its submission will remain due until 2024

The deadline for filing the Withholding Income Tax Return – Dirf 2023 is drawing near. The submission to the Federal Revenue Service pertaining to the calendar year 2022 must be made by 11:59 p.m. (Brasília time) on February 28.

The Dirf will not last much longer, though, as the obligation is scheduled to be replaced in two years by the Digital Tax Bookkeeping of Withholdings and Other Tax Information (EFD-Reinf).

Until then, taxpayers will still be required to file the Dirf. Learn more below on how to file this tax obligation in 2023.

Who is required to file the Dirf in 2023?

Individuals and companies that have paid or credited earnings from which Withholding Income Tax (IRRF) has been deducted are required to file the Dirf, even if the tax withholding took place in a single month within the calendar year. Examples include employers who have withheld income tax on their employees’ payrolls.

Additionally, a few other taxpayers are also legally required to file the Dirf, regardless of whether the tax has been withheld. This situation applies to general partners of unincorporated joint ventures (“Sociedade em Conta de Participação” – SCP) and taxpayers resident in Brazil who have paid, credited, or remitted amounts to individuals or companies with residency abroad.

Special cases

Companies dissolved on account of liquidation, merger, consolidation or total spin-off, are required to file the 2023 Dirf pertaining to the calendar year in which its dissolution took place, and the submission must be made by the last business day of the following month.

An exception is made if a company is dissolved in January, in which case the Dirf may be filed by the last business day of March of that same year.

What information should be supplied?

The Dirf 2023 should inform the total earnings paid to each of the company's employees, contractors, and beneficiaries, including those that have not been subject to tax withholding.

Taxpayers must provide Information related to the calendar year prior to the obligation. Therefore, for 2023, the Dirf should contain information pertaining to 2022.

Why will the Dirf be abolished?

Aiming at unifying the main ancillary obligations into a single format, in July 2022 the Federal Revenue Service published a normative instruction abolishing the Dirf, which is scheduled to be replaced by the EFD-Reinf from 2025 onwards.

Nevertheless, the module for submitting the corresponding information has yet to be implemented into the EFD-Reinf system. Thus, taxpayers will still be required to file the Dirf in 2023 and 2024 to provide the Federal Revenue Service with information regarding the immediately preceding year.

Fines for non-compliance

Those who fail to submit the Dirf this year will be subject to a fine of 2% on amounts reported as income tax, per calendar month.

The minimum fine is BRL 200.00 for individuals and inactive corporations under the Simplified Taxation System (“Simples Nacional”). In all other cases, the minimum fine is BRL 500.00.

Ancillary obligations in good standing

DPC has a team dedicated to providing support in filling out and filing ancillary obligations, ensuring that clients remain in full compliance with the Federal Revenue Service. Contact us: dpc@dpc.com.br