On July 4, the working group of the Chamber of Deputies dedicated to tax reform presented the final report of the complementary bill. One of the proposed changes primarily impacts brick-and-mortar real estate investment funds (Flls), which include properties in their portfolios that generate income for shareholders through rental agreements.

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Under the new bill's rules, the management and administration of investment fund resources—including Flls—would be subject to the Tax on Goods and Services (IBS) and the Social Contribution on Goods and Services (CBS). The services provided would be subject to specific rates for these new taxes, with the rates to be determined later by Congress.

However, the same bill stipulates that the payment of IBS and CBS on the income generated by the assets would be at the discretion of the managers. If adopted, the funds would receive a tax credit to offset other taxes payable.

According to Maria Fernanda Violatti, head of listed funds at XP Research, the presented text is considered a victory for the sector, as it does not include the funds as taxpayers. Prior to the presentation of the final bill text, the market was concerned that Flls would be subjected to specific taxation.

"The new legislation aims to maintain the tax burden on fund operations with uniform rates nationwide," she says.

Given this optionality, market analysts predict that managers will likely choose to continue as non-taxpayers due to the nature of rental agreements and because the additional cost could reduce the attractiveness of the properties in the market, affecting returns for shareholders.

Federal Deputy Arnaldo Jardim (Cidadania-SP), vice-president of the Parliamentary Agricultural Front (FPA), had already stated that he was working to remove FIIs and Fiagros from the taxpayer category.

Gustavo Moura, partner and analyst responsible for the Fund of Funds (FOFs) area at Capitânia Investimentos, views the final project as very positive for the sector, as there was concern that real estate funds would be subjected to taxation.

"Based on what we are observing, nothing should change regarding taxation, meaning there will be no impacts on the funds or the shareholders, which we consider a victory given the overall scenario," he says.

To E-Investidor, Marcos Baroni, chief analyst of real estate funds at Suno Research, emphasized that the market's greatest fear was that the contribution would become mandatory. According to Baroni, paying the tax would affect the revenue of real estate funds due to the nature of rental agreements, which are usually long-term and not subject to revision.