Brazil Supreme Court to decide IPTU tax immunity for infrastructure concessionaires

The Brazilian Supreme Federal Court (STF) is reviewing two key cases that could determine whether private companies operating public infrastructure concessions are subject to the Municipal Property and Territorial Tax (IPTU).

As Brazil has increasingly transferred the management of airports, railways, ports, and highways to the private sector, a legal conflict has emerged regarding reciprocal tax immunity. While the Constitution prevents different levels of government from taxing each other, municipalities are now seeking to tax private concessionaires that utilize public land to provide essential services.

The court is analyzing two specific matters: Theme 1,297, involving Ferrovia Centro-Atlântica, and Theme 1,398, involving Cemig. In the case involving Cemig, Justice Dias Toffoli has proposed a vote in favor of recognizing tax immunity, emphasizing that the properties are dedicated to essential public services and remain reversible to the state, even if the company is a mixed-capital corporation with shares traded on the stock exchange.