On Friday, December 26, 2025, Complementary Law No. 224/2025 (“LC 224”), derived from Complementary Bill No. 128/2025, was published. In general terms, this law reduces federal tax incentives and benefits by 10% and increases the Withholding Income Tax (IRF) rate on Interest on Equity Capital (JCP), as well as the Social Contribution on Net Profit (CSLL) rate for certain institutions in the financial sector.
With regard to tax incentives, LC 224 aims to reduce federal tax benefits by 10% while imposing stricter rules for their granting, extension, and renewal. These rules include, among others, a maximum duration of up to 5 years for such benefits, as well as mandatory outcome evaluation for these incentives.
The 10% reduction established by LC 224 directly affects several federal tax benefits, such as the presumed profit regime, the REIQ program, presumed credits for IPI and PIS/COFINS (including imports), as well as zero or reduced rates for the latter. Furthermore, the Annual Budget Law may list other tax benefits subject to this reduction.
However, certain tax benefits are excluded from this reduction. These include constitutional tax immunities, benefits related to the Manaus Free Trade Zone, zero tax rates for basic necessity products, incentives granted to non-profit organizations, and those linked to investments approved before December 31, 2025.
Specifically for the presumed profit regime, there will be a 10% increase in the presumption rates applied exclusively to the portion of gross revenue exceeding BRL 5,000,000 per calendar year. The tax administration stipulates that this increase will be calculated proportionally for each quarter and will apply to companies with quarterly revenues exceeding BRL 1,250,000.
Especificamente em relação ao lucro presumido, haverá acréscimo de 10% sobre os percentuais de presunção exclusivamente sobre a parcela da receita bruta que exceda R$ 5.000.000,00 no ano calendário. Considerando o regime trimestral de apuração aplicável a esse regime, a Receita Federal entende que o acréscimo de 10% deverá considerar a proporção por trimestre, sendo aplicável às empresas cuja receita bruta exceder R$ 1.250.000,00 por trimestre.
Additionally, LC 224 establishes that if tax incentives exceed 2% of the national GDP, no new programs may be granted or existing ones extended unless compensatory measures are adopted.
Finally, Complementary Law No. 224/25 will come into effect on January 1, 2026, except for tax measures subject to the 90-day precedence rule, which will take effect on April 1, 2026. Companies are strongly advised to evaluate and reassess their tax regimes to mitigate the financial impact of these new rules.
For further information on the subject, we remain at your disposal.
GTLawyers – Tax Team
