PGBL: deadline to deduct up to 12% on income tax ends in December

By choosing this tax benefit, taxpayers can deduct up to 12% of their taxable gross income on the 2025 individual income tax return.

The end of the year is an opportunity for taxpayers to organize their finances, especially regarding income tax. Among the strategies, the Free Benefit Generator Plan (PGBL) stands out as an efficient tool to reduce the taxable base. However, to take advantage of this tax benefit in 2025, it is essential to pay attention to the deadlines and rules.

What is PGBL and how does it help with Income Tax?

PGBL is a type of private pension plan that combines retirement planning with more immediate tax benefits, as this plan allows contributions to be deducted from the taxable income up to a limit of 12%. In practice, this can increase the tax refund or reduce the amount of tax owed.

What is the deadline to take advantage of the PGBL tax benefit?

To use the PGBL as a valid deduction in the 2025 tax adjustment (return referring to the 2024 calendar year), the taxpayer must sign up for the plan or make contributions by December 30, the last banking business day of the year. However, it is always advisable not to leave it to the last minute.

What rules should be observed?

In addition to paying attention to the deadline, it is important for taxpayers to know that the tax benefit of PGBL is valid for those who use the full tax return model. Those who choose the simplified tax return model cannot deduct these contributions. It is also mandatory to contribute to Social Security or the public servants' pension system.

How is PGBL taxation applied?

There are two forms of taxation, with the taxpayer choosing according to their individual tax planning as well as estate and succession planning.

Progressive table: rate variation according to income, starting at 0% and up to a maximum of 27.5% (income tax table).

Exercise table for 2025 (2024 calendar year)

Regressive table: the rate starts at 35% and decreases every two years, reaching 10% after a period of 10 years.  

Also see: Private pension plans: new rule provides flexibility in tax regime choice

Individual Tax Support

DPC has a dedicated unit for individual support, ensuring efficiency, proximity, and confidentiality in handling information. Rely on this support for planning and guidance in the tax field: dpc@dpc.com.br.