Lucro Real vs Lucro Presumido: Choosing Brazil's Corporate Tax Regime
Short answer. How much IRPJ and CSLL a Brazilian company pays depends less on the headline rate than on the regime used to measure profit. The two main options are Lucro Real (actual profit) and Lucro Presumido (deemed profit). For a foreign-owned subsidiary, picking the right one is a planning decision driven by margins, activity and revenue.
The taxes being measured
A Brazilian company’s profit is taxed by IRPJ (15% plus a 10% surtax above a monthly threshold) and CSLL (generally 9%). The regime determines the base on which those rates apply. [Source: Lei 9.249/1995; Lei 7.689/1988 — Planalto]
Lucro Real (actual profit)
Tax is charged on real accounting profit, adjusted for tax additions and exclusions. It is mandatory above a gross-revenue ceiling and for certain activities (notably financial institutions), and it allows the offset of tax losses and the use of credits. It suits companies with thin or volatile margins — if your real margin is low, taxing the real profit is cheaper than taxing a presumed one. [Source: Lei 9.430/1996 — Planalto]
Lucro Presumido (deemed profit)
Tax is charged on a margin presumed from gross revenue (the presumption percentage varies by activity), regardless of the company’s actual margin. It is simpler and available to companies with prior-year gross revenue up to R$78 million. It suits high-margin businesses whose real profit exceeds the presumed base — you are effectively taxed on less than you earned. [Source: Lei 9.718/1998, art. 13 — Planalto]
Lucro Arbitrado
An exceptional regime used when the books are unreliable or unavailable — not a planning choice.
How to choose
The decision turns on three variables:
- Revenue — above R$78M/year, Lucro Real is mandatory.
- Margin — high real margin favors Presumido; low or loss-making favors Real.
- Activity — some sectors are pushed into Real regardless.
For a foreign owner, this is not a formality: the same business can pay materially different tax depending on the regime, and the choice interacts with loss-utilization and the post-2026 dividend layer.
FAQ
Which regime is cheaper? It depends on your real margin: low margins favor Lucro Real, high margins favor Lucro Presumido.
Who must use Lucro Real? Companies above R$78M/year of gross revenue and certain activities (e.g., financial institutions).
Is the choice permanent? The regime is generally elected per year, subject to eligibility — revisit it as revenue and margins change.
📚 Part of our pillar guide: Corporate Tax in Brazil — The Complete Guide for Foreign Companies.
Sources
Official sources reviewed for this brief: the corporate income tax law (Lei 9.249/1995), the CSLL law (Lei 7.689/1988), the rules on profit determination (Lei 9.430/1996), and the Lucro Presumido revenue ceiling (Lei 9.718/1998).