Imposto sobre Propriedade Territorial Rural
Known by the acronym ITR, this tax is charged over properties located in rural areas of Brazil. Know more about who must pay it, what are the rates and cases of exemption.
As in most countries, in Brazil there are several taxes charged over properties and ITR is one of them. The acronym stands for Imposto sobre Propriedade Territorial Rural (Tax on Rural Land Property). As the name indicates, this tax is charged over the possession of rural areas in the country. Native or foreign owners of rural properties located in the Brazil territory are obliged to pay ITR, save a few exceptions that we will discuss further.
Declaration and collection
Unlike the Tax on Urban Property (IPTU), which is released by the municipalities, it is the landowner who launches how much he will have to pay on ITR. It is up to the authorities to check whether the statement is true or not.
The annual statement of ITR is called Declaração do Imposto sobre a Propriedade Territorial Rural (Declaration of Property Tax on Rural) known by the acronym DITR. The DITR, corresponding to each rural property consists of the following documents:
- Documento de Informação e Atualização Cadastral do ITR (DIAC)
- Documento de Informação e Apuração do ITR (DIAT)
The DITR may be presented:
- Via internet, through the use of the transmission program “Receitanet”, available on the website of the Federal Revenue Service.
- On CD, at any Banco do Brasil or Caixa Econômica Federal agency located in Brazil.
What are the rates?
The rate to be used on the calculation of ITR varies with the area of the property and its level of use. The calculation basis for ITR is the taxable value of bare land, known by the acronym VTNT (Valor da Terra Nua Tributável) and its level of use (Grau de Utilização), know by GU. The smaller the property and the higher its level of use, tho lower will be the value of ITR.
For example, lands with total area up to 50 ha and level of use above 80% have a rate of 0.03%. A property with a total area of 5.000 ha and level of use of 30% the tax rate is 20% (values for 2012).
As we have seen, the owner is responsible for measuring his property determining its level of use and the value of bare land. Bare land is the property of nature or natural accession, comprising the ground with its surface and its native forest, natural forest and natural grassland. Level of use is a percentage calculated with the area actually used for rural activity and the total area of the property.
The value of bare land is the market value of the property, excluding amounts related to market:
- Buildings, facilities and improvements
- Temporary and permanent crops
- Pastures and improved
- Planted forests
The VTN reflects the market price of land, determined on January 1 of the year they refer to DITR, and will be considered self-assessment of bare land at market price.
Exemptions and applicability
ITR is not charged over very small rural properties with the following dimensions:
- 100 ha, when the property is located in the municipality understood in the Western Amazon or the Pantanal of the states of Mato Grosso and Mato Grosso do Sul
- 50 ha, when the property is located in the municipality understood in the Polígono das Secas or in Eastern Amazon regions
- 30 ha, when the property is located in any other municipality
The prerequisite for the owner of a small property in the conditions above to be exempted from paying ITR is to not own any other properties in rural or urban areas of the country.
The acronym "ha" stands for hectare, a unit usually used for rural areas measurement. One hectare corresponds to 10.000 square meters or 107.640 square feet.
Are also exempt from collecting ITR:
1) Rural properties comprised in official land reform programs: these properties are characterized by competent authorities as settlements, which must meet the following requirements:
- Be operated by associations or cooperatives of production
- The setting families cannot own any other property
2) The number of rural properties with the same owner, whose total area observe the limits of hectares stated above, if the owner:
- Explore the land alone or with his family
- Has no urban property in the Brazilian territory