by Edmo Colnaghi Neves (PhD), Murray Advogados, Brazil

The tax reform has generated legal rules that, among other consequences, eliminated several tax benefits, as occurred with Complementary Law 224/25 and its regulation by Normative Instruction 2305/25 of the Brazilian Federal Revenue Service. These changes, surprisingly, affected companies that adopted the presumed profit regime, based on the mistaken premise that choosing presumed profit would constitute a tax benefit.

Until then, companies opting for the presumed profit regime applied a percentage defined by law to determine the calculation basis of IRPJ – Corporate Income Tax – and CSLL – Social Contribution on Net Profit – according to the company’s line of business. For service-providing companies, for example, the percentage was 32% of the total annual gross revenue.

Under the new legislation, the portion of revenue exceeding R$ 5,000,000.00 becomes subject to a 10% increase. This increase in calculation consequently leads to higher taxation. According to the cited Normative Instruction, this must also be considered proportionally in quarterly assessments within the fiscal year. As a result, there may be excessive advance payment of taxes, depending on the annual outcome.

Presumed profit is not a tax incentive, but rather one of the regular tax assessment regimes. Depending on the circumstances, it may lead to either a reduction or an increase in the tax burden. This has prompted several taxpayers to challenge these rules in court, based on the principles of strict legality and legal certainty, to prevent what they view as an undue increase in the tax burden.

February 2026