The tax reform regarding consumption is already underway, but it seems that a large part of the market continues to operate with contract models under the old rules.
Taxpayers, inundated with information and thirsty for instant wisdom, end up remaining inert, as it is still unclear where to begin to tackle this issue, which will consume part of their business's profit margin.
The previous system, despite being complex and unfair, has been in place for almost 40 years, introduced by the 1988 Federal Constitution, and provides a certain degree of comfort when it comes to leasing operations, which are not subject to ISSQN (Tax on Services of Any Nature) and ICMS (Tax on the Circulation of Goods and Services).
The big question surrounding the leasing of power generation assets is whether they are covered by the 70% tax rate reduction, as provided for in article 261, sole paragraph, of Complementary Law No. 214 of 2025, for real estate leasing operations.
To date, the regulatory text of the Consumption Tax Reform has not been published to clarify whether lease agreements that include integrated movable assets – for example, renewable energy generation equipment – would be covered by the aforementioned tax rate reduction.
In February 2026, the Technical Council of Municipal Tax Administrations published a Technical Note stating that, regarding the issue of the 70% tax rate reduction, tax authorities should pay close attention to the substance of the contracts.
Tax issues that ultimately require multidisciplinary knowledge are nothing new, but here we have a clear example of the complexity involved, as they require legal professionals specializing in contracts, real estate, tax, and energy regulation.
This contractual planning, if well executed, can reduce the current tax burden for owners of generating assets until 2032, but it also allows lessees to review clauses of interest to them at a time when they may be in a more comfortable position for such negotiation.
Strategy will be key, and inertia here can be costly for the entrepreneur who relied on the invisible hand that regulates the market.
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