Share with your friends

Brazil – “Early Withdrawal” Possibilities for Inactive FGTS Accounts

Brazil – “Early Withdrawal” Possibilities for Inactive

This GMS Flash Alert reports on a new measure in Brazil that allows employees who resign or their employment terminates to withdraw their FGTS amounts.



Related content


The Brazilian federal government has promulgated Provisional Measure no 763/161 to allow employees who have resigned or have their employment contract terminated for just cause prior to December 31, 2015, to withdraw their FGTS2 (Government Severance Indemnity Fund for Employees) amounts before the end of a “three-years of inactivity in the fund” wait period. Up until the PM no 763/16, rules mandated, with some exceptions, a three-year wait. 


Employees who resigned or have their employment contract terminated for just cause prior to December 31, 2015 will be entitled to withdraw the amounts deposited in their FGTS inactive accounts.  

This will be a financial “windfall” for these employees. This represents an important change in the law that affects international assignees who have participated in the FGTS.  Such assignees who return to their home countries or have started another international assignment may immediately withdraw funds from their FGTS accounts, whereas previously they had to wait until after an uninterrupted period of inactivity that lasted three years. These changes apply to employees who were not dismissed by the company (in other words, if they retire or their assignment comes to an end).


The FGTS is a monthly contribution made by the employer on the employee’s behalf, to a specific account registered under the employee’s name in a government bank, at 8 percent of the employee’s monthly remuneration.  Note that it is not a withholding or deduction from the employee’s wages – it is a cost fully paid and remitted by the company.  The purpose of this fund is so the employee can eventually use the amounts deposited under special conditions, such asretirement or dismissal without just cause. 

Upon dismissal without just cause or after three years without contribution to the fund (the fund is inactive) – among other circumstances such as disease or serious illness or retirement, for example – the individual can withdraw the amounts. 

Extension of FGTS Rules

Under the new changes introduced by PM no 763/16, employees who resigned or have their employment contract terminated for just cause prior to December 31, 2015, will be able to withdraw the FGTS amounts prior to this inactive three-year period for the fund. 

In addition, the employees are entitled to receive a profit-sharing payment according to the FGTS’s investment performance.


  • Individuals can check by means of a Web site to research their inactive accounts as per the Provisional Measure.
  • The amounts can be withdrawn from March 2017 to July 2017. The payment schedule is defined as per the date of birth of the individuals.
  • FGTS amounts can be withdrawn in Brazil at the “Caixa Economica Federal” or abroad through the Brazilian Consulate, in those countries where such a procedure is permitted.


1  Medida Provisória nº 763, de 22 de dezembro de 2016, published in Diário Oficial da União de 23.12.2016 – this changes some articles of the Federal Law 8.036/90 that regulates the FGTS.

2  FGTS stands for “Fundo de Garantia do Tempo de Serviço.”  It is a type of “personal reserve savings” scheme for employees.

The information contained in this newsletter was submitted by the KPMG International member firm in Brazil.

© 2021 KPMG Tax Advisors-Assessores Tributrios Ltda., a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Connect with us


Want to do business with KPMG?


loading image Request for proposal

Stay up to date with what matters to you

Gain access to personalized content based on your interests by signing up today

Sign up today