Ruling COSIT No. 89/2025, published by the Federal Revenue Service in June 2025, introduced a significant change in the tax treatment of so-called financial barter transactions (permutas financeiras)—operations in which a landowner transfers real property to a developer and, instead of receiving independent units (present or future), is entitled to a percentage of the project’s revenue or sales proceeds.
- Legal Nature of the Transaction
According to the tax authority, regardless of contractual terminology, the economic substance of the transaction must prevail. Thus, when there is no transfer of real estate units, but rather payment in cash or participation in revenue, the transaction must be characterized as an onerous transfer (a sale) rather than as a barter.
- Tax Consequences
Under this classification:
- The landowner will be subject to capital gains taxation and payment of Individual Income Tax (IRPF), with progressive rates of up to 22.5%;
- The developer, in turn, will be required to pay taxes under the Special Taxation Regime (Regime Especial de Tributação – RET), at a unified rate of 4% on gross revenue.
- Risk of Double Taxation
The interpretation adopted by the Federal Revenue Service may result in double taxation: the developer pays RET on the amount passed on to the landowner, and the landowner, in turn, must still pay income tax on the capital gain. This outcome has been criticized by experts as a potential violation of the principles of ability to pay and tax equity.
- Recommendations
In light of this scenario, it is advisable to:
- Conduct a thorough review of financial barter agreements, with particular attention to the form of payment and allocation of tax liabilities;
- Consider structural alternatives, such as qualifying the landowner as a co-developer, in order to benefit from the RET regime;
- Undertake preventive analysis for potential administrative or judicial disputes concerning the matter.