Anyone who invests in FIIs (Brazilian real estate investment funds) must report that position on their Imposto de Renda (IR, Brazil’s income tax) return every year, even when no tax is due on the income received.
Where to report the units
FII units are reported on the “Bens e Direitos” (Assets and Rights) form, usually under the code corresponding to real estate funds. You must report the number of units, the acquisition cost and the fund’s CNPJ (Brazilian corporate taxpayer ID) — all of this information is usually available in the income statement sent by your brokerage.
What about the monthly distributions?
The income distributed monthly by FIIs, when exempt, is reported on the “Rendimentos Isentos e Não Tributáveis” (Exempt and Non-Taxable Income) form. Even so, it is important to report it even though it is exempt — leaving it out can create inconsistencies with the data that the Receita Federal (Brazil’s federal tax authority) already receives from the stock exchange itself and from brokerages.
And when you sell units at a profit?
When you sell FII units at a profit, Imposto de Renda may be due on the capital gain, calculated monthly and paid via DARF (federal tax payment slip), unlike the taxation of stocks. The rules have their particularities, so it is worth checking the legislation in force or getting help from an accountant.
Keep your brokerage’s income statements throughout the year — they make filing time (much) easier.
This content is for informational purposes only and does not replace guidance from an accountant or income tax professional.