Income Tax Exemption for People with Serious Illnesses

Se o imposto já foi pago indevidamente, é possível solicitar restituição junto à Receita Federal.

Brazilian tax legislation provides for exemption from income tax for people with serious illnesses on income from retirement, pension or retirement. This exemption also applies to supplements received from private organisations and alimony payments. However, other types of income, such as salaries and rents, are not covered by the exemption.

Diseases that Guarantee Exemption

To enjoy this benefit, the taxpayer must have one of the following diseases:

• AIDS (Acquired Immune Deficiency Syndrome);

• Mental alienation;

• Severe heart disease;

• Blindness;

• Radiation contamination;

• Paget's disease in advanced stages (Osteitis deformans);

• Parkinson's disease;

• Multiple sclerosis;

• Ankylosing spondyloarthritis;

• Cystic fibrosis (Mucoviscidosis);

• Leprosy;

• Severe nephropathy;

• Severe hepatopathy (exemption only applicable from 01/01/2005);

• Malignant neoplasm;

• Irreversible and disabling paralysis;

• Thalidomide syndrome;

• Active tuberculosis.

Legal basis: Item XIV of Article 6 of Law 7.713/1988.

What is not exempt?

The exemption does not apply to:

• Wages and labour income (even if the person has the disease);

• Labour income received together with retirement/pension;

• Rent and other sources of income not related to retirement.

How to Apply for Exemption?

Obtain an official medical report (issued by hospitals or public medical services) confirming the illness.

The report must state

1. The date on which the illness arose (if this cannot be determined, the date of the report applies);

2. Whether the illness is under control and, if so, how long the report is valid for.

3. Present the report to the source of payment (INSS, private pension scheme, etc.) so that they stop deducting tax.

Retroactive effect - How can I recover unduly paid tax?

If the report indicates that the illness was contracted in a previous period and tax was unduly withheld, the taxpayer can request a refund of the amounts unduly paid, observing the following guidelines:

• Current tax year: The request can be made in the Annual Adjustment Declaration, declaring the income as exempt from the granting of the benefit.

• Previous years: A rectifying declaration must be sent, including the exempt income according to the medical report.

• Balance of tax payable: Taxpayers can request a refund or compensation for amounts unduly paid using the PER/DCOMP programme, available on the Receita Federal website.

  
  

Do I still need to file an income tax return?

Yes. Even if you are exempt, if you fall within the rules that require you to file a tax return, you must file it as normal.

If you have any doubts, consult a tax specialist to ensure that all procedures are carried out correctly.