In a recent decision, the Administrative Council of Tax Appeals (Carf) ruled that loans granted by the Brazilian Development Bank (BNDES) may be classified as investment grants and, as such, excluded from the Corporate Income Tax (IRPJ) taxable base calculated under the actual profit regime.
The case involved a taxpayer that used BNDES financing for investment projects and claimed the right to exclude the subsidized amounts from its taxable income. The core of the dispute concerned the legal nature of BNDES and whether it could be considered a public entity for the purposes of applying Article 30 of Law No. 12,973/2014.
The Brazilian Federal Revenue Service (RFB) opposed the exclusion, arguing that BNDES is a legal entity governed by private law, which, in its view, disqualified it from being treated as a provider of investment grants. This position was based on paragraph 6 of Article 198 of RFB’s Tax Directive No. 1,700/2017, which conditions the exclusion on the benefit being granted directly by a public body.
However, Carf took a purpose-oriented approach and held that, although BNDES is formally organized under private law, it is a state-owned company that forms part of the indirect federal administration and is subject to state control. This status reinforces its connection to the public sector and supports the classification of its subsidized loans as investment grants.
Carf emphasized that Article 30 of Law No. 12,973/2014 does not distinguish between entities governed by public or private law, but rather between those that belong to the public sector and those that do not.
This decision strengthens the legal basis for treating subsidized interest as investment grants—not only in the case of loans from BNDES, but also from other government-affiliated institutions such as Finep (Funding Authority for Studies and Projects)—allowing the exclusion of such amounts from the Corporate Income Tax (IRPJ) and Social Contribution on Net Profit (CSLL) tax bases. It also promotes tax efficiency, legal certainty, and regulatory predictability for companies securing financing from public sector institutions.
The recent interpretation by Carf regarding subsidized loans from BNDES as investment grants may also apply to the measurement of such grants under Law No. 14,789/2023, effective from 2024.
Recognizing this interpretation can result in significant tax savings for companies investing in expansion and modernization, allowing reallocation of saved resources to strengthen operations.
Glossary – Tax
Administrative Council of Tax Appeals (Carf) – Brazilian administrative tribunal responsible for resolving tax disputes between taxpayers and the federal government.
Brazilian Development Bank (BNDES) – State-owned financial institution that provides long-term funding for investment projects in Brazil.
Corporate Income Tax (IRPJ) – Federal tax on corporate profits in Brazil.
Actual profit regime (lucro real) – Brazilian tax regime under which corporate income tax is calculated based on accounting profit, adjusted by tax additions and exclusions.
Brazilian Federal Revenue Service (RFB) – Government body responsible for tax administration, collection, and enforcement in Brazil.
Tax Directive No. 1,700/2017 – Normative instruction issued by the RFB detailing rules for calculating corporate taxes.
Finep (Funding Authority for Studies and Projects) – Public agency that finances innovation and research-related projects in Brazil.
Social Contribution on Net Profit (CSLL) – Federal tax levied on a company’s net profit, in addition to IRPJ.
Law No. 14,789/2023 – Brazilian law providing rules on the taxation of subsidies and incentives, effective as of 2024.
Bill No. 1,087/2025 – Proposed legislation introducing changes to personal income tax brackets and the creation of a minimum tax for high-income individuals.
Minimum income tax (IRPFM) – Proposed tax mechanism that sets a minimum effective tax rate for high-income individuals, regardless of the source of income.
Receivables Certificates – Fixed-income instruments backed by real estate (CRI) or agribusiness (CRA) receivables.
Real Estate Investment Funds (FIIs) – Investment vehicles focused on income-generating real estate assets.
Investment Funds in Agribusiness Chains (Fiagro) – Funds designed to channel investments into agribusiness production chains.
