# Brazilian tax reform and judicial rulings > Live situation record from CLSTR: https://clstr.news/situations/brazilian-tax-reform-and-judicial-rulings > Updated: 2026-09-16T22:42:45.000Z. Sources: 10. Developments: 4. Brazil is undergoing significant shifts in its tax landscape driven by legislative reforms and judicial rulings. Following the sanctioning of Complementary Law No. 227 in January 2026, which regulated the Imposto sobre Transmissão Causa Mortis e Doação (ITCMD), there has been an urgent push for estate planning. This reform mandates progressive tax rates—increasing up to a national ceiling of 8%—and requires the use of market values rather than historical values for calculating asset transfers. Simultaneously, the Brazilian judiciary is addressing critical taxation issues. The Supreme Federal Court (STF) ruled in a 5-4 decision that PIS/Cofins taxes do not apply to the financial returns of technical reserves for insurance and private pension entities, a decision estimated to cost the federal treasury up to R$ 5.3 billion over five years. In the real estate sector, the Superior Court of Justice (STJ) upheld a 20% Income Tax on capital gains for real estate ‘fund of funds’ (FoFs) structures. Regarding ITBI tax immunity for real estate companies during asset transfers for social capital incorporation (Theme 1.348), the STF has established a provisional majority of five votes to grant immunity. Relator Edson Fachin argued that constitutional restrictions regarding predominant real estate activities should only apply to mergers, incorporations, spin-offs, or corporate extinctions, rather than the initial formation of capital. This position was supported by ministers André Mendonça, Nunes Marques, Luiz Fux, and Cristiano Zanin. Dissenting ministers Gilmar Mendes and Flávio Dino argued that taxation is permitted for companies primarily engaged in real estate activities to protect municipal revenues. The judgment has been suspended following a request for review by Minister Alexandre de Moraes. ## Claims - The Supreme Federal Court ruled that PIS/Cofins taxes do not apply to financial applications from technical reserves of insurers and private pension entities. (single source) - The ruling could cost the public treasury up to R$ 5.3 billion over five years, according to the 2026 Budget Guidelines Law. (single source) - The Superior Court of Justice upheld the 20% Income Tax charge on profits obtained by a real estate fund when selling shares of another fund. (single source) - Rio Bravo Investimentos argued that taxation should only occur when funds reach the investor, rather than during internal portfolio operations. (single source) - The Supreme Federal Court has begun analyzing whether real estate companies must pay ITBI when transferring assets to incorporate them into social capital. (single source) ## Timeline ### 2026-09-16: Brazil's Supreme Court majority favors ITBI immunity for real estate firms The Brazilian Supreme Court has a five-vote majority favoring ITBI tax immunity for real estate companies during capital social integralization, though the ruling is currently suspended. 4 sources. https://clstr.news/cluster/brazils-supreme-court-majority-favors-itbi-immunity-for-real-estate-firms ### 2026-09-14: Brazil's Supreme Court debates ITBI immunity for real estate holdings The Brazilian Supreme Federal Court is debating whether ITBI tax immunity applies to real estate companies during capital increases, a decision that could impact corporate restructuring and municipal revenues. 2 sources. https://clstr.news/cluster/brazils-supreme-court-debates-itbi-immunity-for-real-estate-holdings ### 2026-09-02: Brazilian courts issue major rulings on insurance and real estate taxation Brazilian courts have issued major tax rulings: the STF exempted insurance technical reserves from PIS/Cofins, while the STJ upheld Income Tax on real estate fund share sales. 3 sources. https://clstr.news/cluster/brazilian-courts-issue-major-rulings-on-insurance-and-real-estate-taxation ### 2026-08-31: Brazil tax reform triggers urgent estate planning due to new ITCMD rules Brazil's new ITCMD regulations mandate progressive tax rates and market-value assessments, prompting urgent estate planning to manage rising inheritance and donation costs. 2 sources. https://clstr.news/cluster/brazil-tax-reform-triggers-urgent-estate-planning-due-to-new-itcmd-rules --- Cite as: Brazilian tax reform and judicial rulings. CLSTR, https://clstr.news/situations/brazilian-tax-reform-and-judicial-rulings