The Tax Reform, provided for in the Federal Constitution (art. 156-A), in Complementary Bill No. 108/2024 and in Complementary Law No. 214/2025, was primarily aimed at restructuring Brazil’s consumption taxation system.

Five complex taxes — PIS, Cofins, IPI, ICMS and ISS — were eliminated and replaced by two new ones: the Goods and Services Tax (IBS) and the Goods and Services Contribution (CBS).

To avoid disruption and ensure legal certainty for ongoing operations, Complementary Law No. 214/2025 established optional transitional regimes applicable to certain real estate activities, including lease agreements, onerous assignments, and property leasing.

Although the final rates of the new system — especially the IBS and CBS — have not yet been defined, all indications suggest an increase in the tax burden applicable to real estate transactions. Current estimates point to a combined rate between 26.5% and 28%.

For this reason, it is essential that taxpayers with fixed-term lease and rental agreements currently in force observe the legal deadlines in order to benefit from the transitional regime.

Article 487 of Complementary Law No. 214/2025 authorizes taxpayers to remain temporarily under the previous PIS and Cofins rules, according to the legal entity’s tax regime. Thus, companies taxed under the presumed profit regime may pay IBS and CBS at a combined rate of 3.65% on the gross rental revenue, replicating the current PIS/Cofins treatment.

To do so, the following requirements must be met:

Non-residential lease

• Contracts executed until January 16, 2025 (the date of the enactment of LC 214/2025).

• Notarized signatures or electronic signatures of the parties are required.

• By December 31, 2025, the contracts must be recorded or filed with the Real Estate Registry or the Registry of Deeds and Documents — alternatively, they may be made available to the Federal Revenue Service and to the IBS Management Committee, although the procedure for such submission has not yet been regulated.

• Validity of the transitional benefit: for the entire contractual term.

Residential lease

• Contracts executed until January 16, 2025.

• Notarized signatures, electronic signatures of the parties, or proof of rent payment made by the month following the start of the contract’s term are required.

• Exemption from registry filing and from submission to the Federal Revenue Service or the Management Committee.

• Validity of the transitional benefit: until December 31, 2028, even if the contract has a longer term.

Summary of the main points of attention:

• New contracts executed after January 16, 2025 may not opt for the transitional regime.

• Non-residential lease contracts must be registered by December 31, 2025 — a final, non-extendable deadline.

• Residential leases, although exempt from registration, will have a maximum validity under the old regime only until 2028.

• It is recommended to review and formalize signatures and registrations as soon as possible to ensure proper classification and avoid losing the tax benefit.

If your company has lease agreements that fall within these criteria, Cesar Peres Dulac Müller Advogados is available to assess each situation and provide guidance on the necessary measures to ensure compliance with the transitional regime within the legal deadlines.

CPDMA Team