Brazil's Federal Revenue challenges FIP structures over R$15 billion tax dispute

The Federal Revenue Service (Receita Federal) is pursuing a series of tax assessments against private equity-style investment vehicles known as Fundos de Investimento em Participações (FIPs). The disputes involve roughly R$15 billion in alleged under‑payment of corporate income tax (IRPJ) and social contribution on net profit (CSLL). The tax authority argues that many of these funds were used as “tax packaging” to convert ordinary asset sales, normally taxed at 34%, into transactions where tax is deferred or reduced within the investment structure. It contends that the funds lack genuine economic substance, proper governance committees, and real participation in asset management. Defendants, represented by major law firms, maintain that the structures complied with existing securities regulations, that the holdings served legitimate corporate and financial purposes, and that the tax authority cannot retroactively impose new substance requirements. The case spans three main fronts: (1) funds administered by BNY Mellon and BTG Pactual involving infrastructure and energy assets; (2) funds managed by Itaú (Intrag) and Bradesco linked to real‑estate and corporate portfolios; and (3) funds with Santander and Oliveira Trust as custodians, tied to venture‑capital, technology and logistics projects. The outcome could affect banks, asset managers and investors nationwide.