- Bonification: distribution of new shares with effective capitalization of company reserves, changing its share capital
- Stock Split: division of existing shares without changing the equity value or the company’s share capital
- Reverse Split: process inverse to splitting, reducing the number of shares without changing the share capital
Understanding how to declare stock bonification on Income Tax is essential for every Brazilian investor who wants to keep their finances regularized with the Federal Revenue. With specific rules and detailed procedures, many investors face difficulties in this process, risking being caught in tax audits or paying taxes improperly.
What is stock bonification and how it works in Brazil
Stock bonification is a corporate procedure by which a company distributes new shares to its current shareholders at no additional cost. This process occurs when the company decides to capitalize part of its profit reserves or capital, transforming them into new shares that are distributed proportionally to existing shareholders. In the Brazilian market, this practice is quite common among companies listed on B3 (Brasil, Bolsa, Balcão), especially when they want to increase their share capital without requiring new contributions.
In the Brazilian context, understanding how to declare stock bonification is fundamental for any investor. The Brazilian Federal Revenue Service has specific rules for this type of operation, which differ significantly from other corporate events such as dividends or interest on equity. While dividends represent distribution of profits in cash, bonification changes the shareholding structure without immediate financial impact.
When a company announces a bonification, it defines a specific proportion. For example, a 10% bonification means that for every 10 shares you own, you will receive an additional one. The average acquisition cost must be mandatorily recalculated, which has direct implications when it comes to declaring stock bonification on income tax. This adjustment is essential so that, at the time of sale, the capital gain calculation is performed correctly.
| Aspect | Description |
|---|---|
| Definition | Free distribution of new shares to existing shareholders |
| Motivation | Capitalization of company reserves without need for new contributions |
| Effect on price | Proportional dilution of market value per share |
| Tax impact | Need to adjust acquisition cost for future calculation of capital gain |
| Fiscal obligation | Mandatory declaration on income tax, even without immediate taxation |
The Pocket Option platform offers various updated educational resources that help Brazilian investors understand these corporate processes and their fiscal implications, making it more accessible to understand how to report stock bonification on income tax, even for those who are just starting in the capital market.
Differences between bonification, stock split and reverse split
It’s common for beginning investors to confuse bonification with other corporate events. However, there are fundamental differences that directly impact the process of declaring stock bonification:
Each of these events has distinct tax treatments. Pocket Option experts recommend that investors maintain detailed records of all communications received from companies, including dates, proportions, and type of event, significantly facilitating the declaration process later.
Brazilian legislation on stock bonification and fiscal obligations
Brazilian tax legislation treats stock bonification in a specific way. According to the Normative Instruction of the Federal Revenue No. 1,585/2015, bonification itself is not a taxable event at the time of receipt. However, it directly affects the average acquisition cost of shares, which will have a tax impact when the shares are sold in the future, with tax on realized capital gains.
For investors seeking to understand how to declare stock bonification, it is fundamental to understand that the Federal Revenue requires the declaration of this event even if there is no immediate taxation. This requirement aims to maintain control over the taxpayer’s assets and ensure correct taxation in case of future sale. Failure to make this declaration can generate inconsistencies in assets and lead the taxpayer to a tax audit.
| Legal Basis | Provision |
|---|---|
| IN RFB 1.585/2015 | Defines specific tax treatment for bonifications and other corporate events |
| Law 7.713/1988 | Establishes basis for taxation of capital gains on the sale of goods and rights |
| Law 8.981/1995 | Provides for the taxation of net gains in operations carried out on stock exchanges |
| Law 9.250/1995 | Regulates Personal Income Tax and its accessory obligations |
Pocket Option provides constantly updated educational materials that address these legal aspects, helping Brazilian investors understand their tax obligations and how to report stock bonification on income tax correctly, avoiding problems with tax authorities and potential fines.
Tax rates and moment of taxation
An important aspect about how to declare stock bonification is related to the moment of taxation. Although bonification itself is not taxed upon receipt, the subsequent sale of these shares is subject to taxation on capital gains, with progressive rates ranging from 15% to 22.5%, depending on the amount of gain:
- 15% for gains up to R$ 5 million
- 17.5% for gains between R$ 5 million and R$ 10 million
- 20% for gains between R$ 10 million and R$ 30 million
- 22.5% for gains above R$ 30 million
Stock exchange operations have specific rules, including the possibility of exemption for monthly sales of up to R$ 20,000.00, which can be strategically used by investors who understand how to report stock bonification on income tax. For shares acquired until 12/31/2022, there is also the possibility of using the fiscal incentive with reduced rate for the sale of small lots.
Step by step: how to declare stock bonification on income tax
The process for declaring stock bonification on Income Tax follows specific steps that must be carefully observed by Brazilian investors. Below, we present a detailed to assist you in this procedure, considering the particularities of declaration in Brazil:
Before declaration: organize your documentation
Before starting the process of how to report stock bonification on income tax, it is essential to gather all necessary documentation to avoid errors and inconsistencies:
- Annual income statement provided by the broker (mandatory document)
- Bonification notices and communications issued by companies (usually available on IR websites)
- Monthly trading statements demonstrating the incorporation of the new shares
- Documentation of the original acquisition cost of shares (brokerage notes)
- History of previous declarations (if you have already declared these shares in previous years)
Pocket Option recommends that its clients maintain rigorous control of these documents, preferably in digital format organized by calendar year, facilitating access during the declaration period and in case of eventual audit by the Federal Revenue.
| Step | Procedure |
|---|---|
| 1 | Access the “Assets and Rights” form in the income tax declaration |
| 2 | Select code 31 – Shares (including those listed on the stock exchange) |
| 3 | Fill in identifying data of the share (trading code, CNPJ of the issuing company) |
| 4 | Report the total quantity of shares after bonification in the specific field |
| 5 | Calculate and report the new average acquisition cost adjusted by bonification |
| 6 | Detail in the “Discrimination” field the bonification event, including date, proportion, and quantity |
It is essential to understand that when declaring stock bonification, the total acquisition cost does not change, but is diluted by the new number of shares. For example, if you had 100 shares at a total cost of R$ 1,000.00 (R$ 10.00 per share) and received a 20% bonification (20 new shares), your new average cost will be R$ 1,000.00 divided by 120 shares, resulting in R$ 8.33 per share. This calculation is fundamental for the correct assessment of capital gains in eventual future sale.
The Pocket Option platform offers specific calculators and tools that help Brazilian investors perform these calculations accurately, minimizing errors when declaring stock bonification and avoiding problems with the Federal Revenue.
Common errors when reporting stock bonification on income tax
Even experienced investors can make mistakes when declaring stock bonification. Knowing the most frequent errors among Brazilian investors can help avoid them and prevent complications with tax authorities:
| Error | Consequence | How to avoid |
|---|---|---|
| Not declaring received bonification | Asset inconsistency and possible inclusion in Federal Revenue tax audit | Maintain updated control of all operations and corporate events through spreadsheets or applications |
| Maintaining the same average cost after bonification | Incorrect calculation of capital gain on sale, resulting in incorrect tax payment | Recalculate the average cost considering the new number of shares according to Federal Revenue formula |
| Confusing bonification with dividends or interest on equity | Inadequate tax treatment and possible double taxation or tax evasion | Understand the fundamental differences between corporate events with help from Pocket Option educational materials |
| Not detailing the event in the “Discrimination” field | Difficulty in proving in case of audit and possible questioning by Revenue | Document in detail every bonification received, including date, quantity, and proportion |
| Reporting monetary value of bonification | Distortion in asset calculation and possible undue taxation | Understand that bonification changes quantity of shares, not the total value of the investment |
Pocket Option experts recommend that, in case of doubt about how to report stock bonification on income tax, the Brazilian investor consult an accountant specialized in investments or use the technical support offered by the platform, which has professionals familiar with Brazilian tax legislation.
A particularly common error occurs when the investor receives a bonification close to the income tax declaration period. In these cases, it is important to verify if the event occurred before or after the closing of the base year, as this will determine in which declaration the bonification should appear, according to specific rules of the Brazilian Federal Revenue:
- Bonification with base date (cut-off date) until 12/31: must be declared in the IR of the respective year
- Bonification with base date after 12/31: will be declared only in the IR of the following year
- Bonifications approved but not yet effective on the declaration date: should be mentioned in the discrimination field as a pending event
Strategies to optimize the declaration of bonifications
Understanding how to declare stock bonification goes beyond simply complying with tax obligations. Strategic Brazilian investors can use this knowledge to optimize their tax position within legal limits:
Pocket Option offers personalized guidance on these strategies, helping Brazilian investors make informed decisions about their portfolio and tax obligations. The platform provides webinars and specific educational material on how to report stock bonification on income tax in an optimized manner and in compliance with Brazilian legislation.
| Strategy | Benefit |
|---|---|
| Partial sale considering old and bonified lots | Possibility of tax optimization based on average acquisition cost |
| Compensation of previous losses in variable income | Reduction of calculation basis for taxation as permitted by Brazilian legislation |
| Use of monthly exemption of R$ 20,000.00 in stock exchange operations | Possibility of sale without tax incidence for small lots |
| Planned donations of bonified shares to family members | Succession planning with possible tax advantages within legal limits |
A little-known strategy among Brazilian investors involves careful analysis of the ideal moment to make sales after receiving bonifications. In some cases, waiting for the appropriate period can result in significant tax advantages, especially when combined with other portfolio operations and the investor’s annual tax planning.
Use of reports and control tools
To facilitate the process of declaring stock bonification, many Brazilian investors resort to specialized tools compatible with Federal Revenue requirements:
- Portfolio control spreadsheets with automatic adjustment for bonifications and other corporate events
- Specialized investment declaration software with integration to the Federal Revenue program
- Information consolidation services offered by Brazilian brokers
- Personalized asset evolution reports with event history by asset
Pocket Option integrates exclusive resources into its platform that simplify the monitoring of these corporate events in the Brazilian market, allowing the investor to maintain a precise and updated history of their positions, facilitating the moment of declaring stock bonification during the annual declaration submission period.
Special cases in the declaration of stock bonification
There are specific situations that require additional attention when declaring stock bonification in the Brazilian context. Investors who face these scenarios should be particularly attentive to the correct procedures required by the Federal Revenue:
| Scenario | Recommended Procedure |
|---|---|
| Stock bonification in foreign companies held by Brazilians | Declare in the “Assets and Rights” form with specific code for shares abroad (3900) and information in original currency |
| Bonified shares in probate process | Update the estate declaration and consider in the distribution of assets, with supporting documentation for the administrator |
| Bonification followed by reverse split or split in the same calendar year | Calculate the combined effect on average cost and quantity, detailing chronologically in the discrimination field |
| Shares in joint custody (co-ownership) | Divide the declaration proportionally between holders according to ownership percentage registered with the broker |
| Bonification of companies that changed name/trading code | Indicate in the discrimination field the change that occurred, maintaining the history for tax audit purposes |
Pocket Option offers specialized consulting for Brazilian investors facing these particular cases, ensuring appropriate guidance on how to report stock bonification on income tax even in more complex situations, considering the particularities of Brazilian legislation and tax system.
An especially challenging case in Brazil involves companies that have undergone merger, acquisition, or spin-off processes after the distribution of bonifications. In these scenarios, calculating the average cost can become quite complex, requiring detailed documentation and, possibly, specialized consulting with knowledge of the Brazilian capital market.
Bonification in different classes of shares
When a Brazilian company issues bonifications in different classes of shares than those originally held by the investor (for example, receiving preferred shares as bonification of common shares), the process of declaring stock bonification requires additional care specific to the Brazilian market:
- Verify if the bonification occurred in the same proportion for all classes, as defined in the company’s Bylaws
- Calculate separately the average cost for each class of share
- Document in detail the conversion in the discrimination field, including the conversion factor and the date of the event
- Maintain record of quotations of each class at the time of bonification for eventual tax questions
Tools and resources to facilitate the process
With technological evolution, various tools have emerged to help Brazilian investors declare stock bonification with greater precision and ease, considering the particularities of the national tax system:
Pocket Option continuously develops new technological solutions adapted to the Brazilian market to help its clients manage their tax obligations related to investments, including the process of how to report stock bonification on income tax in compliance with current legislation.
| Resource | Functionality | Benefit |
|---|---|---|
| Brazilian brokerage note importers | Automatic reading of trading notes in B3 standard format | Elimination of typing and calculation errors, ensuring accuracy in entries |
| Average cost calculators with Brazilian rules | Automatic recalculation after corporate events according to Federal Revenue standards | Precision in cost adjustment after bonifications, avoiding tax questions |
| Alert systems for corporate events on B3 | Notification about approved bonifications in Brazilian companies | Advanced preparation for adjustments in declaration and tax planning |
| Integrations with official Federal Revenue program | Export of data to the official income tax declaration program | Automated filling of declaration, reducing transcription errors |
A recent trend in the Brazilian market are “tax harvesting” solutions, which automatically analyze the investor’s portfolio and suggest strategic operations for tax optimization within legal limits, considering even the impact of received bonifications and the taxpayer’s history of operations.
Specialized support for complex cases
In more complex situations related to how to declare stock bonification in Brazil, it may be necessary to seek specialized support from professionals who know Brazilian tax legislation in depth:
- Consulting with accountants specialized in investments and Brazilian capital market
- Legal advice for interpretation of federal tax legislation applicable to corporate events
- Financial planners focused on tax efficiency and knowledge of the Brazilian tax system
- Technical support from investment platforms with experience in the national market
Pocket Option makes available service channels with professionals specifically trained in the particularities of the Brazilian market to assist investors with specific questions about how to report stock bonification on income tax, complementing digital tools with the human support necessary for particular cases.
Conclusion: Mastering the declaration of bonifications in the Brazilian context
Understanding how to declare stock bonification is essential knowledge for any Brazilian investor who seeks to remain in compliance with tax obligations and optimize their investment strategy. Although the process may initially seem complex due to the particularities of Brazilian tax legislation, with the correct information and adequate tools, it becomes a manageable procedure.
Remember that, in Brazil, bonification itself is not a taxable event at the time of receipt, but it changes the average acquisition cost of shares, directly impacting the assessment of capital gains in future sales. Maintaining detailed records, understanding the necessary calculations as required by the Federal Revenue, and being attentive to declaration deadlines are fundamental steps to avoid problems with Brazilian tax authorities.
Pocket Option is committed to providing Brazilian investors not only with a robust platform for operations but also the necessary knowledge about how to report stock bonification on income tax, contributing to a safer and more conscious investment journey in the Brazilian capital market.
Take advantage of the educational resources, tools, and support made available to improve your understanding of the fiscal aspects of investments in the Brazilian context. With adequate knowledge about declaring stock bonification, you will be able to make more informed and strategic decisions, maximizing the potential of your investments while maintaining compliance with national tax legislation.
FAQ
How do I know when I received a stock bonification?
You will be informed by the company through a Material Fact or Market Announcement. Additionally, your broker will send a notification informing about the corporate event and the date when the new shares will be credited to your account. The bonification will also appear in your custody statement as a specific entry.
Do I need to pay tax when receiving stock bonification?
No. In Brazil, receiving stock bonification is not a taxable event at the time. Taxation will occur only when you sell these shares, at which point the tax will apply to the capital gain calculated based on the average cost adjusted by the bonification.
How to calculate the new average cost after a bonification?
The calculation is simple: divide the total amount invested (original acquisition cost) by the new total number of shares after the bonification. For example, if you had 100 shares that cost R$1,000 and received 20 more shares as bonification, your new average cost will be R$1,000 ÷ 120 = R$8.33 per share.
What happens if I don't declare a received bonification?
Non-declaration can generate asset inconsistency in your tax return, potentially leading to a Federal Revenue tax audit. Additionally, when you sell the shares, the calculation of capital gains tax will be incorrect, which may result in improper taxation or tax evasion.
Can I use the monthly exemption of R$20,000 to sell shares received in bonification?
Yes. Shares received in bonification, when sold, are subject to the same taxation rules as normal shares. This means that monthly sales of up to R$20,000 on the stock exchange are tax-exempt, regardless of whether they are original shares or received through bonification.