Last Wednesday (19), Rio Bravo Investimentos released a material fact announcement stating that the Administrative Council of Tax Appeals (CARF) upheld the ABCP11 fund’s request to nullify the ruling issued by the Brazilian Federal Revenue Judgment Office (DRJ). This ruling stems from an administrative process initiated in 2020, in which the real estate investment fund (FII) was accused of tax irregularities. 

To break it down beyond legal jargon: after the DRJ’s initial decision, the fund appealed, taking the case to CARF, a higher instance. The council acknowledged the validity of one of the fund’s arguments and ordered the DRJ to reassess this specific point. However, the remaining issues are still under review, with a decision expected within 30 days. 

Meanwhile, the case returns to the DRJ’s trial queue, where experts consulted by REsource estimate that the new review process could take one to two years. In the statement, the fund administrator indicated that it would appeal if the final ruling is unfavorable to the fund and its investors.

When contacted by REsource, Rio Bravo viewed the decision positively and stated that the expectation is for a resolution within two years.

"The decision is positive as it directs the DRJ to analyze the tax accusations strictly as originally formulated, without introducing new considerations or elements to the process," the company stated.

They concluded by addressing the expected timeline for the case. "There is no exact deadline for a new ruling by the DRJ, but we anticipate it will take one to two years. After this decision—whether favorable or unfavorable—the case will be referred back to CARF for further review."