How to make your statement Computer: computer by the taxpayer may choose to complete the declaration throug h the

program IRPF (Individual Income Tax), available at the IRS. The statements made by the computer will be issued a receipt for delivery after the item is re alized. If you need to make rectification of the declaration, the taxpayer will have to report the number of the deposit slip before. Program IRPF: Available for download at the IRS, the program of Income Tax (IRPF) can be used both by those using the simplified model, and by whom opted for the full model. Those who prefer to make the declaration by the program may send your statement via the Internet or diskette, as detailed below: • Internet: If you want to send the statement completed by the program IRPF the In ternet will have to save the statement in the floppy or hard disk of your comput er and use the system Receitanet. Also available on the IRS, the system Receitan et validates and transmits via the Internet, the statements. Besides using compr ession and encryption of data in the declaration, the system enables the deliver y with digital certificate, which guarantees the authorship of the statement. Fl oppy: To deliver on diskette, you must copy the program also available at and deliver it in Banco do Brazil and Caixa Economica Feder al. Online: The online submission, which was restricted to some taxpayers and no t needed the program download the recipe, was abolished this year. • • Phone: this mode of transmission was suspended from the IRPF 2006 (base year 2005). Form: can be obtained and delivered to agencies and franchised stores in the Brazilian Post and Telegraph Company (ECT) • Who can not use formulárioHá few years, has been restricting this form to submit a declaration. This year, the state can not form part of taxpayers who: receive d taxable income of an individual or from the outside, wanted to declare depende nts who have income or assets, were part of the corporate structure of a company for at least a month last year ; want to take the employer to deduct Social Sec urity's domestic servant, that made donations to political parties or candidates , presenting the declaration on behalf of the estate; wishing to take advantage of deductions Book Bin. received taxable income in the statement whose sum was g reater than R $ 100 thousand; • • • • • • • • • • • • • received exempt income, non-taxable or taxed exclusively at source whose sum was greater than R $ 100 thousand; obtained in any month, the capital gain on sale of assets or rights, subject to the tax; carried out operations in stock exchang es , commodities, futures and the like, had gross revenue of the agricultural bu siness in more than R $ 78,821.40; have information to be provided in the declar

ation which exceeds the number of lines available in the tables of the forms. Who must file income tax returns All that fit into the criteria listed below must submit a declaration of IR. The re are two options statement: simplified and complete. Remember: Even if you do not need to submit the declaration of income tax, the Annual Statement of Exempt is mandatory, because you risk having your CPF suspended if it does not comply with the obligation. Below we list the situations in which the taxpayer must sub mit a declaration of income tax for this year. Received during the year 2007, gr oss taxable income exceeding R $ 15,764.28 or non-taxable income, taxable and ex empt, above R $ 40,000.00; Who participated in the corporate structure of compan y, including inactive, as proprietor, partner or shareholder, or cooperative. Th e exception is for taxpayers whose participation in a corporation or cooperative traded was less than $ 1,000.00; performed in any calendar month, sale of asset s or rights in which it was established capital gain subject to incidence of tax , even in cases where the taxpayer has opted for exemption through the applicati on of the proceeds of the sale purchase of residential property within 180 days; conducted business on the stock exchange, commodities, futures and the like; ha d possession or ownership of property or rights, including bare land, totaling m ore than R $ 80,000.00 for the year 2007, passed the resident status in Brazil d uring the year 2007, individuals with gross revenues exceeding U.S. $ 78,821, 40 through rural activity,€or who are offsetting losses from previous years or yea rs that the statement refers, in this case, being prohibited by the declaration of the simplified model. Taxable income The following are taxable income and can not fail to be included in your income tax return. The taxable income are those over which the income tax of individual s, as long as the ceiling of R $ 1,313.69 R $ 15,764.28 monthly or annually. Tha t is, who have an income above this ceiling, and corresponding to one of the fol lowing items will have to pay income tax on that value. • Income abroad: such income will be converted to real using the buying rate of th e dollar prevailing at the time of income or tax payments, income from salary re gardless of whether or not you have a formal contract; • • Gain on rents: the received value you can deduct the taxes and charges on the pr operty, as property tax, condominium, etc. expenses. Remember that to achieve th ese discounts, fees and taxes should all be paid off by the lessor; Gain on tran sportation for cargo and passenger judicial pension income: including temporary alimony. • • Exempt income and non-taxable By law, the following income shall be exempt from income tax, ie you need not co llect tax on them. Even not having to pay tax on this income, you have to let th em in his statement, provided, of course, you are obliged to deliver declaration of income tax and not part of taxpayers exempt. For example, in the "Who must f ile income tax returns" explains that a person who participates in the corporate structure of a company is required to submit a declaration of income tax. This requirement is independent of income that the taxpayer received during the year.

This example makes clear why some taxpayers have to submit a declaration settin g annual IR, despite having received only the income listed below, all free of I R. • • Income from salary of up to R $ 1,313.69 per month; pensions of up to R $ 1,313. 69, and that value is calculated as the sum of the value of all pensions receive d, or if you receive two pensions from $ 700.00 so the total is equivalent to R $ 1,400.00, and therefore covers income tax, income PIS / PASEP; Gains and divid ends from profits that have already been taxed at source; Gain on savings, bill of mortgage , letter mortgage and mortgage-backed securities; Receipt of benefit s provided by Social Security, in case of death or permanent disability; Fixes c ost of goods due to indexation; free Plots cleared in rural activities; Receive notice FGTS severance pay, sick pay and funeral pay; Receiving unemployment insu rance; Receipt of retirement for persons over 65 years, since that does not exce ed R $ 1,313.69 per month; Benefits of voluntary retirement program (PDV ) Recei pt of retirement service by accident or serious illness; Net gains earned by ind ividuals in operations on the spot market of shares traded on stock exchanges an d gold transactions, financial assets, whose value of disposals is made each mon th less than or equal to $ 20,000.00, for a set of actions and for gold as a fin ancial asset individually; Receipt of income tax refunds. • • • • • • • • • • • • • Which one to choose: Simplified or complete? Aante to discuss in greater detail what are the costs deductible for income tax purposes, we believe that is more relevant to discuss different forms of state i ncome tax. If you have to deliver their declaration of income tax, you can choos e between two forms: simple or complete. In both cases you will need the followi ng documents: • • • Information on earnings of the company where he works or where she worked; Infor mation on financial investments of the banks which have or had accounts; Receipt s for medical expenses, education expenses etc.., Although it is not necessary t o attach them in the declaration. The main differences between the two types of models are summarized below: • Simplified model: The simplified declaration may be made by any contributor. How ever, the deductions in this model are replaced with a standard discount of 20% on the taxable income, provided that the discount does not exceed the amount of R $ 11,669.72. Thus,€the simplified model is suitable for people who do not have many deductions, since in that case it is advisable to opt for the full model. When filling out the simplified model, you must inform the CPF or CNPJ their pri mary payer, but must also indicate the fields provided income from all sources. Complete Model: If you do not fit the simplified model, ie have many deductions to be made, such as health care, education spending, dependent etc. May declare the tax in a complete manner, where it is necessary to inform all costs and inco me occurred in the year. Be sure to save all your receipts and proof of income, because you never know if it will suffer a possible audit of Revenue Federal.Se its total deductions exceed the limit of R $ 11,669.72 your best option is to ma ke a full declaration. Despite being subject to deductions limited to R $ 1,584.

60 and costs of education have the individual annual limit of R $ 2,480.66, medi cal expenses can be deducted in full and, as the tax on some investments are alr eady paid at source it is not difficult to have deductions limite.Caso above tha t you choose the full model, be sure to keep receipts of income and expenditure for five years at least, the period during which the IRS may require proof of de ductions if there suspicion of tax evasion. • Annual Statement of Exempt As discussed above, even if you do not need an income tax return, you must submi t the Annual Statement of Exempt (DAI), binding on all persons who are registere d with the SFC and that over the past year, had taxable income of up to R $ 15,7 64.28. The delivery of the statement begins in August and extends until the end of November. Built in 1998, declaring exempt aims to re-register all taxpayers registered wit h the CPF, and can therefore determine any outstanding issues in entries and del ete the numbers of taxpayers who have moved to another country, those who died a nd those who have more of a register in the system. • Who is exempted? If you signed up with CPF in the year of submission of the decl aration shall not be obliged to deliver his statement of exempt. Also exempted i s the person whose number of CPF has been reported in the Statement of Annual Ad justment of IRPF when presented in conjunction with the other spouse on behalf d este.Os dependents included in the declaration of another taxpayer are exempt fr om declaration-free. But for that, the IRS requires that the declaration by the holder, social security numbers of dependents declared to be included. Re-regist ration of CPFÉ as important as delivering the annual statement of adjustment, si nce the taxpayer who fails to deliver the declaration of free for two consecutiv e years will automatically terminate your CPF, which could end up in a lot of he adaches, since the document is essential to daily pessoa.Portanto any, if you di d not deliver his statement of last year's free, you can rectify the situation b y paying a fee of R $ 5.50 in one of the following sites: branches of the Bank o f Brazil, Federal Savings Bank or Post Office. That done, their situation will b e automatically adjusted. • Deductions allowed by law The deductions below allow you to reduce the basis for calculating your income a nd minimize the "bite of the lion" on your income. Current tax law allows the de duction of various expenses, such as, for example, spending on social security c ontribution to official and private spending on dependents, medical expenses and education etc.. For ease, we split the deductions allowed by law into two group s: with or without limits, as detailed below. Deductions without limit • • Contribution to the welfare official: you may deduct the full amount that was pa id in 2007. Ledger: the costs may be deducted on carrying cash book for private tutors, as compensation from third parties with employment and related labor and social security charges, fees, and cost expenses necessary for the realization of revenues and to maintain the production source . Alimony: can be deducted fro m all payments to alimony. Medical expenses: all expenses are deductible on the treatment itself, dependents and alimentandos, pursuant to court order. This may

include spending on doctors, dentists, psychologists, physiotherapists, occupat ional therapists, speech therapists, hospitals, laboratory, orthopedic appliance s and artificial limbs, as well as dental. They will not be included spending on medicines,€with nurses, the purchase of eyeglasses, hearing aids etc. • • Deductions to limit • • Expenses dependent: the annual limit is R $ 1,584.60 per dependent, also apply t o those born in 2007. Expenditure on education: the individual annual limit of R $ 2,480.66 per person or dependent. Among the allowable expenses are: expenditu re on early childhood education (nursery, preschool), elementary education, seco ndary education, higher education (undergraduate, master's, doctoral and special ist) and professional courses (technical and technological). However, deductions are not allowed in uniform, equipment and school transportation, language cours es or computer etc.. Contribution to Pension Plan, the Retirement Fund Scheduled Individual (FAPI) and Plan Generator Free Benefit (PGBL): the contributions tha t match up to 12% of your taxable income may be deducted. Deduction of incentive s: including donations to funds controlled by the Municipal Councils, State and National Rights of the Child and Adolescent, encouraging the cultivation and enc ouragement of audiovisual activity. The sum of these deductions is limited to 6% of tax computed. Retirements and pensions over 65 years: You may be deducted th e amount of R $ 1,313.69 per month, or R $ 15,764.28 per year, corresponding to that portion of exempt income from retirement and pensions paid to public or pri vate sectors from the month in which the taxpayer to complete 65 years of age. C ontribution to Employee Welfare Officer Domestic: limited to R $ 578.40 * + R $ 14.00 or R $ 15.20 (depending on the month of vacation pay). • • • • As discussed above, there are several situations in which you can kill certain v alues of its basis for calculating income tax, which means that the tax will be taxed on the net value of these deductions. In practice, the basis for calculati ng the tax is that value which will be applied on the rates of income tax. How is the retention of the IR source For many people who are not familiar with the matter, there are more technical t erms used in the declaration of IR that confound taxpayers. This is the case, fo r example, when we say that the tax was "withholding". This term is used when re ferring to the portion of the tax which was collected by who made the payment to the taxpayer already discounted this percentage retained as required by law. Th is happens with companies that retain the income tax from the salary of its empl oyees, provided it receives a value above the ceiling of R $ 1,313.69. In this c ase, the company is obliged by law to deduct income tax on the employee's salary , which receives the net amount of the discount. It is also the responsibility o f undertaking the transfer of the discounted value to the IRS. In practice, only the taxpayer has no income tax withheld by the payer in cases where you receive a payment from another person or some value coming from abroad, as a retirement , for example. In these cases, the tax is not withheld by the payer, which there fore does not transfer the values to the IRS. This means you will receive the gr oss pay, but will be responsible for calculating and

payment of the tax booklet by the famous lion, which is nothing more than a form used for the payment of income tax was not withheld by the payer.