By Felipe Pinheiro Auge and Yasmin Taborda Agostinhaki
The sale of real estate by asset holding companies that have elected the presumed profit tax regime (lucro presumido) raises a tax issue that, despite its practical significance, still lacks a consistent position from the Brazilian Federal Revenue Service (Receita Federal). The central question concerns the classification of the proceeds from the sale: whether they constitute operating revenue—subject to the presumed profit margins of 8% for Corporate Income Tax (IRPJ) and 12% for the Social Contribution on Net Profit (CSLL)—or non-operating revenue, in which case the transaction is treated as a capital gain and subject to a substantially higher tax burden. The difference between these two classifications can be significant, particularly in high-value transactions.
The publication of COSIT Consultation Ruling No. 95, on June 24, 2026, brought the issue back into focus by reaffirming the Brazilian Federal Revenue Service’s restrictive position in a common scenario: the sale of properties that had originally been recorded as non-current assets and were later reclassified as inventory following an amendment to the company’s corporate purpose. As discussed below, however, the tax authorities’ position on this issue has not been consistent, and the administrative courts have likewise failed to establish a settled interpretation.
The Role of a COSIT Consultation Ruling
A Consultation Ruling (Solução de Consulta) is the formal mechanism through which the Brazilian Federal Revenue Service responds to taxpayers’ questions regarding the interpretation of tax legislation. When issued by the General Coordination of Taxation (Coordenação-Geral de Tributação – COSIT), the ruling is binding on the entire federal tax administration: no tax auditor may adopt a different interpretation in relation to a taxpayer whose factual circumstances are identical to those analyzed in the ruling. As such, it serves as an internal normative precedent whose observance is essential for effective tax risk management.
Divergent Consultation Rulings
Between 2014 and 2026, COSIT issued at least four Consultation Rulings (Nos. 254/2014, 7/2021, 257/2023, and 95/2026) addressing the sale of real estate by companies whose corporate purpose includes real estate activities. The conclusions, however, varied depending on the specific facts of each case. In some situations, COSIT accepted the application of the presumed profit percentages applicable to real estate activities; in others, it concluded that the proceeds should be taxed as capital gains.
According to the Revenue Service’s own reasoning, the distinguishing factors included the property’s original purpose (whether acquired for resale or for operational use), its accounting classification from the time of acquisition, the actual—not merely formal—exercise of real estate trading activities, and the consistency between amendments to the company’s corporate purpose and its effective business operations. Depending on how these factors are combined, the applicable tax treatment may differ substantially.
The Current Scenario Before the CARF
The issue also remains unsettled before the Administrative Council of Tax Appeals (CARF). In Decision (Acórdão) No. 9101-006.793, issued in November 2023, CARF’s Higher Chamber ruled in favor of the taxpayer, recognizing the application of the 8% presumed profit margin on the grounds that the purchase and sale of real estate had always been included in the company’s corporate purpose and that the prior leasing of the properties did not alter the operating nature of the revenue generated by their sale.
However, in several other decisions—including more recent ones—the same tribunal adopted a more restrictive approach, requiring taxation under the capital gains rules where the accounting reclassification of the property was not supported by the economic substance of the transaction.
The coexistence of conflicting interpretations—both in the Brazilian Federal Revenue Service’s consultation rulings and in CARF’s case law—demonstrates that the issue does not lend itself to broad or generalized conclusions. The applicable tax treatment depends on a case-by-case assessment, taking into account the property’s history, the company’s corporate and accounting documentation, and whether the taxpayer’s conduct accurately reflects the economic substance of the transaction.
Final Considerations
For asset holding companies that own or intend to sell properties previously used in their operations—whether as corporate headquarters, industrial facilities, warehouses, or leased assets—the tax treatment of the transaction does not automatically follow from the company’s articles of association or from an accounting reclassification of the property. Nevertheless, as evidenced by certain COSIT rulings and favorable CARF decisions, there are legitimate legal grounds to support the application of the presumed profit percentages where the company’s real estate activities are genuine, continuous, and supported by economic substance.
The current legal landscape makes one point clear: each transaction requires an individualized analysis, carefully considering the factual circumstances that both the Brazilian Federal Revenue Service and CARF have regarded as decisive. In an environment marked by legal uncertainty, specialized tax advice is not merely an advantage—it is essential.
The Marins Bertoldi Tax Law team closely monitors developments in this area and is available to provide guidance tailored to the specific circumstances of each case.
