IRRF (withholding at source)
IRRF is the tax the broker withholds at the moment of the trade: 1% on the net day-trade gain and 0.005% on the sale in ordinary trades. It settles nothing — it is an advance, and it offsets what you pay on the month's DARF. Run this calculation now: day trade tax calculator (brazil)
IRRF is the broker's withholding at source. It is not the final tax: it is an advance that offsets the monthly payment.
The nickname explains the purpose
The 0.005% withholding on ordinary trades is known in Brazil as the 'dedo-duro' — the informer — and the name states its job: the amount is far too small to collect revenue, and it exists to tell the tax authority the trade happened. The 1% on day trades collects and informs at the same time.
In both cases the broker withholds and remits. The statement or the annual income report shows the total withheld in the period — that is where the number comes from, not from an estimate.
How it enters the month's maths
Assessment is monthly: 20% on the net day-trade gain, after offsetting accumulated losses in the same category. From the amount due, subtract the IRRF already withheld that month. What remains is the DARF.
If the withholding exceeds the amount due — which happens in a month of small gains and heavy turnover — the difference is not lost: it carries forward as a credit.
There is a floor: a DARF below ten reais is not paid. The amount rolls into the following month instead of generating a slip.
The mistake it causes most
The common error is believing the withholding settles the matter. It does not: the individual assesses and pays, and the broker only advanced a part. Anyone who skips the DARF believing 'the broker already deducted it' accumulates penalties and interest on the difference.
The reverse happens too: forgetting to offset the IRRF and paying twice on the same slice. The figure is in the report — worth checking before issuing the slip.
FAQ
Is IRRF the final tax on day trading?
No. It is an advance. The final tax is 20% on the net monthly gain, and the IRRF withheld offsets that amount on the DARF.
Where do I find how much was withheld?
In the broker's income report or statement, which shows the total for the period. Estimating instead of checking is how the figure ends up counted twice or not at all.
What if the withholding exceeds the tax due?
The difference becomes a credit against following months. It is not lost and it is not refunded automatically.