Decision by the Federal Regional Court of the 3rd Region (TRF‑3) recognizes the unconstitutionality of the increase in IRPJ and CSLL tax burdens for companies opting for the presumed profit regime.
By Rafael Maniero and Mauricio Nucci
Legale Overseas, no. 969.
Federal Appellate Judge Wilson Zauhy of the Brazilian Federal Regional Court of the 3rd Region (TRF‑3) set aside the application of the 10% increase in the Corporate Income Tax (IRPJ) and the Social Contribution on Net Profit (CSLL) imposed on companies opting for the presumed profit tax regime, as established by Supplementary Law No. 224 of 2025. According to the judge, the increase in the tax burden violates the constitutional principle of legality, as it improperly equates a tax assessment methodology with a tax benefit.
In his decision, the judge emphasized that the legislation in question is intended to reduce federal tax benefits, but ultimately improperly extended its effects to the taxation of profits of companies subject to the presumed profit regime. This is because such a system does not constitute a tax benefit, but rather a methodology for determining the tax base, making the government’s proposed linear reduction of incentives inapplicable.
At the core of the debate, taxpayers argue that equating a tax assessment methodology with a tax benefit distorts the nature of the regime and violates relevant constitutional principles, such as tax equality, ability to pay, and free competition. The choice of the presumed profit regime is lawful and must be respected by the tax authorities as such, and cannot be treated as a form of tax waiver.
On this matter, it is worth noting that this framework is an optional methodology applicable to companies with annual gross revenue of up to BRL 78 million. Supplementary Law No. 224/2025 provides for a 10% increase in the presumed profit margin applied to the tax calculation for revenue exceeding BRL 5 million per year.
In this context, the tax burden for companies opting for the presumed profit regime becomes variable, potentially approaching 10% for those operating near the upper threshold of the regime, which undermines the predictability and rationality of the tax system.
In addition to the substantive issues, the judge also highlighted the lack of adequate time for companies to adapt to the new rules. The law was enacted on December 26, 2025, with effects as of January 2026 (and, in the case of CSLL, as of the second quarter of 2026), resulting in clear prejudice to taxpayers.
As a result, several taxpayers have been assessing the advisability of filing individual lawsuits, particularly with a view to preserving cash flow. There are reports of favorable injunctions, notably in the States of São Paulo and Rio de Janeiro.
Vaz de Almeida Advogados closely monitors developments in this matter, analyzing the impacts of Supplementary Law No. 224/2025 and related judicial decisions, with a focus on legal certainty in tax matters.
Translation Disclaimer
This document was originally drafted in Portuguese and subsequently translated into English using artificial intelligence (AI).
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