Reducing the payment of income tax (PPD) of natural persons, that the expenses for pets are now counted as deductible expenses, as well as the taxation of public broadcasts with 12% and 15% on the holders of sports forecasts are some of the reforms that will be applied in the country with the Regulation on the organic law for strengthening the family economy, after the Constitutional Court gave a positive opinion on Friday, June 16.

Entry into force and application now depends on the national government, which must pass a decree and send it for publication in the National Gazette. It should be taken into account that there are some taxes that will come into force immediately, while others from 2024.

But what reforms will happen with the tax reform?

1. Income tax

There will be a major reduction in the payment of this tax, effective immediately. Currently, the reduction is 10% and 20% of personal expenses, which were limited to seven basic baskets (around $5,000). A 10% reduction was achieved by those who reported an annual income greater than USD 25,000, and a 20% reduction by those who reported less than that value. The reform foresees that the reduction amounts to 18% of these expenses, but the upper limit and the reduction vary depending on family obligations:

Therefore, 18% of these limits are equivalent to reductions ranging from $964 to $2,753, compared to the current ones of $500 and $1,000, depending on income level.

2. IR deduction for pet expenses

Deductible expenses in the country are for clothing, education, food and health, and within those four items it will now be possible to include expenses corresponding to pets at the expense of the taxpayer, such as food, veterinary care. and accessories.

3. VAT on public events

This decree of the law abolishes the exemption from payment of value added tax (VAT) that public shows had. In Article 6 of this document, it is stated that in Article 56, number 11 is abolished. That is, a tax of 12% will be applied to public events.

Reductions in income tax and VAT for public performances take effect immediately. This is the opinion of the Constitutional Court on the tax reform

4. Go to the sports forecast operator

The tax reform requires platform operators to pay 15 percent on the income generated by individuals and companies engaged in sports forecasting.

5. Bandage

Changes to the tax regime for entrepreneurs and popular companies (Rimpe) show that popular companies with annual sales of up to $2,500 will not pay income tax, but when sales exceed that value – up to $20,000 – they will have to cancel and the installments will be progressive, between 5 and 60 dollars.

Entrepreneurs are also included in this regime, who currently have to make their declarations if sales reach up to $300,000 and pay according to a progressive table.

The taxi drivers’ union expects the Constitutional Court to evaluate the tax regulation positively

6. Taxi drivers in Rimpe

With the changes, taxi drivers are now included in Rimpe as popular businesses and must pay IR according to their income, which would be between $5 and $60, if the income ranges from $2,500.01 to $20,000, according to the table that will now be implemented. In addition, the obligation of electronic invoicing is abolished for the sector.

7. Craftsmen are excluded from Rimpe

Craftsmen and those who produce or import goods or provide services taxed with a special consumption tax are excluded from Rimpe. According to DZI, 500,000 craftsmen will once again strictly use the benefits of the Law on Craftsmen.