Refund of the 25% Income Tax: Who Can Claim It and How

For years, the INSS withheld 25% income tax from the pensions of people living outside Brazil, with no exemption bracket and no progressive table. In October 2024, the Federal Supreme Court (Supremo Tribunal Federal, STF) declared this taxation unconstitutional. The new rule already applies to current payments, but the excess withheld in previous years does not return to the retiree's account on its own: it must be claimed. This article explains who can file this claim, how much time remains, what the routes are (administrative and judicial), and which documents should be gathered before starting.

If your question is about how pensions are taxed today, in 2026, see the article on INSS retirees in Portugal and income tax in 2026. Here the focus is different: recovering what has already been withheld.

What the STF decided and why it opens the door to a refund

Article 7 of Law 9,779/1999, as worded by Law 13,315/2016, required income tax to be withheld at source at a rate of 25% on retirement and survivor pensions paid to residents abroad. In ARE 1,327,491 (Topic 1,174 of general repercussion), the full STF, unanimously, in a virtual session held from October 11 to 18, 2024, established the thesis that this taxation is unconstitutional. The judgment became final on November 28, 2024.

Three points make the decision relevant for those who want to claim a refund:

• There was no modulation of effects. According to Opinion SEI 453/2025/MF of the Office of the Attorney General of the National Treasury (Procuradoria-Geral da Fazenda Nacional), no temporal limitation of the decision's effects was proposed. Without modulation, the decision is not limited to future payments.
• The consequence is the progressive table. The same opinion clarifies that the decision requires the progressive rates to be applied, including the exemption bracket. The amount to be refunded is the difference between the 25% withheld and what would be due under the table.
• The Federal Government no longer contests the thesis. The PGFN included the topic on the list of matters it is exempt from contesting and appealing. Under Article 19-A, § 1, of Law 10,522/2002, the auditors of the Brazilian Federal Revenue Service (Receita Federal) apply the binding understanding also for purposes of administrative refund of undue payments, and § 2 extends the rule, where applicable, to those responsible for withholding.

For current payments, the Receita Federal adapted its rules through Normative Instruction RFB 2,299/2025, published on December 18, 2025, which now provides for the progressive table, with the reduction table, for retirement and survivor pensions paid to residents abroad. The normative instruction does not address the refund of amounts withheld earlier; for that, the general rules of the National Tax Code (Código Tributário Nacional) apply.

Who can claim a refund

In general terms, a person is entitled to claim a refund if, in the month of each withholding, he or she met these conditions:

• received a retirement or survivor pension from a Brazilian source (the most common case is an INSS benefit, including a survivor's pension);
• was a resident abroad for Brazilian tax purposes, and was therefore subject to the 25% withholding applicable to non-residents;
• had tax withheld above the amount that would result from the progressive table in force in that month.

The case that gave rise to Topic 1,174 involved a retiree living in Portugal who received a benefit equal to the minimum wage: the 25% was applied to the entire benefit. In situations like this, where the benefit fell within the exemption bracket, the entire amount withheld was undue. Where the benefit was higher, the portion exceeding the tax calculated under the table is recovered.

The right does not depend on the retiree holding Portuguese citizenship or living specifically in Portugal: it applies to residents abroad in general. But it does depend on residence abroad being proven for each period. This is where many claims stall, as explained below.

Pensions from civil servants' own pension schemes and supplementary pension plan benefits were also subject to the 25% rule, but the Brazil–Portugal Double Taxation Convention treats this income differently from social security pensions (Articles 18 and 19). In these cases, the analysis must start with how the income is classified under the convention.

Deadline: five years, counted month by month

The right to a refund of tax overpaid is set out in Article 165 of the CTN. Article 168(I) sets a deadline of five years, counted from the extinguishment of the tax credit. For taxes subject to self-assessment (lançamento por homologação), such as tax withheld at source, Article 3 of Complementary Law 118/2005 clarifies that extinguishment occurs at the time of the advance payment.

In practice, this means that each monthly withholding has its own deadline. There is no single date for the entire period: with each month that passes, the oldest withholding can no longer be claimed. A claim filed in October 2026, for example, generally reaches withholdings made from October 2021 onward; earlier ones are already time-barred.

Two points of caution:

• The deadline keeps running until the claim is filed. Waiting for an automatic correction or for specific guidance from the Receita Federal does not interrupt the count for those who have not yet filed any claim.
• If the administrative claim is denied, the action to annul that decision is time-barred after two years (Article 169 of the CTN).

Refunded amounts bear interest equivalent to the Selic rate, calculated from the date of the undue payment (Article 39, § 4, of Law 9,250/1995).

If the withholdings began more than four years ago, time is already a factor. The Sene & Araújo team can review your statements and identify which months are still within the deadline. Contact the firm to schedule a conversation.

Administrative route: step by step

The Receita Federal instructs that a refund of tax withheld at source on income subject to exclusive taxation be requested through the PER/DCOMP program or, if it cannot be used, through the Refund or Reimbursement Request form (Pedido de Restituição ou de Ressarcimento), with reference to IN RFB 2,055/2021 (Receita Federal — undue or excess withholding). A possible roadmap:

1. Confirm non-resident status for each period. Check whether the Notice of Definitive Departure from the Country (Comunicação de Saída Definitiva do País) and the Definitive Departure Return (Declaração de Saída Definitiva) were filed and on what dates. Under IN SRF 208/2002, a person who leaves permanently is a non-resident from the date of departure, provided the notice is filed; without it, the person remains a resident for the first 12 months of absence (Articles 2(V) and 3).
2. Gather the statements for each year. They show the gross amount of the benefit and the tax withheld month by month.
3. Redo the calculation month by month. For each month within the deadline, apply the monthly progressive table then in force and compare the result with the amount withheld. The difference is the amount to be claimed.
4. File the claim. Through PER/DCOMP or, if that is not possible, through the form, with documents proving the withholding and residence abroad.
5. Follow up on the process. The Receita Federal may request additional documents. Responding within the deadline avoids a denial for lack of evidence.

At the same time, it is advisable to confirm that the INSS already applies the new rule to current payments. If the 25% deduction continued in 2026, this indicates that the paying source may not have a record of residence abroad. IN SRF 208/2002 provides that a non-resident must notify the paying source of this status in writing (Article 3, § 2) and that a person leaving the country must report the date of definitive departure (Article 10, § 1).

Judicial route: when it makes sense

If the administrative claim is not feasible, or is denied, an action for refund of undue payment (ação de repetição de indébito) may be brought against the Federal Government in the Federal Courts. For claims of up to sixty minimum wages, jurisdiction lies with the Federal Small Claims Civil Court (Juizado Especial Federal Cível), where individuals may be plaintiffs (Articles 3 and 6 of Law 10,259/2001).

Because the PGFN is exempt from contesting and appealing on the thesis, the dispute tends to focus on two points: proof of residence abroad in each period and the calculation of the amounts. The judicial route is usually considered when there are several years to recover, when non-resident status is debatable because the departure notice was not filed, or when the Receita Federal denies the claim.

Three practical scenarios

Departure reported and withholdings between 2021 and 2025

A retiree moved to Portugal in 2019, filed the departure notice and return, and has since been subject to the 25% withholding. With residence well documented, the natural route is the administrative claim, covering the months still within the five-year deadline.

Departure never reported

A retiree has lived in Portugal for years but never filed the departure notice. The INSS withheld 25% because it had his address abroad. Before claiming the refund, it is necessary to organize proof of the actual date of the move and, if applicable, regularize the departure. A claim filed without this basis may be challenged precisely on the issue of residence.

25% withholding still in 2026

If the withholding continued after IN RFB 2,299/2025, there are two fronts: correcting the records with the paying source, so that future payments follow the progressive table, and including the 2026 months in the refund claim.

Document checklist

• Benefit award letter and benefit number;
• Income and tax withholding statements for each year, and monthly payment statements, when available;
• Receipts for the Notice and the Return of Definitive Departure from the Country, if filed;
• Proof of residence abroad for each period: residence card, tax residence certificate issued by the Portuguese Tax Authority, certificate from the parish council (junta de freguesia), lease agreement, or deed of purchase of the home;
• Identity document and a CPF in good standing;
• Bank details for crediting the refund;
• If there is an attorney-in-fact, a power of attorney with powers to represent before the Receita Federal.

Common mistakes

• Expecting the refund to be automatic. IN RFB 2,299/2025 corrected the withholding going forward; the past depends on a claim.
• Claiming everything since the start of the pension. Only withholdings from the last five years can be recovered. Including time-barred months delays the review.
• Calculating based on the current table. The progressive table has changed several times in recent years; each month must be calculated using the table in force at the time.
• Failing to prove residence. Without a departure notice or other evidence, the Receita Federal may consider that the person was resident in Brazil, which changes the entire calculation.
• Treating a private pension as if it were INSS. The convention gives different treatment to each type of pension.

When to consult a lawyer

Legal support usually makes a difference when there are several years of withholding to recover, when the definitive departure was never formalized, when the benefit is not from the INSS, when the administrative claim was denied, or when the retiree has died and the heirs want to know whether there are still amounts to be received. Sene & Araújo, with lawyers in São Paulo and Albufeira, provides legal counsel on the claim, whether administrative or judicial; the tax filing side is coordinated with each client's accountant. See also the page on INSS retirees in Portugal or talk to our team.

• STF — ARE 1,327,491, Topic 1,174 of general repercussion (decided in a virtual session on October 11–18, 2024; final and unappealable on November 28, 2024)
• PGFN — Opinion SEI 453/2025/MF (items 24 to 29: scope, absence of modulation, finality, and exemption from contesting and appealing)
• Normative Instruction RFB 2,299/2025 (Official Gazette, DOU, of December 18, 2025), Article 1 (new wording of Article 19, sole paragraph, of IN RFB 1,500/2014) and Article 11 (entry into force)
• Law 9,779/1999, Article 7 (as worded by Law 13,315/2016)
• National Tax Code (Código Tributário Nacional) (Articles 165, 165-A, 168, and 169)
• Complementary Law 118/2005, Article 3
• Law 10,522/2002, Article 19-A, §§ 1 and 2
• Law 9,250/1995, Article 39, § 4 (Selic interest on refunds)
• Law 10,259/2001, Articles 3 and 6 (Federal Small Claims Courts)
• Receita Federal — Undue or excess withholding (PER/DCOMP and form; IN RFB 2,055/2021)
• Normative Instruction SRF 208/2002 (Articles 2, 3, 10, and 11-A)
• Decree 4,012/2001 — Brazil–Portugal Convention (Articles 18 and 19)

Sene & Araújo Sociedade de Advogados team. Content prepared and reviewed by the firm's lawyers, admitted to the Brazilian Bar Association (OAB) and the Portuguese Bar Association (Ordem dos Advogados), with offices in São Paulo and Albufeira. The provisions cited were checked against the official sources listed above. Meet the team.