Insights
Lucro Presumido vs Lucro Real for a foreign-owned subsidiary
Lucro Presumido is capped at R$78 million of annual gross revenue and taxes a presumed margin. Lucro Real has no cap. How to compare them.
The corporate income tax regime you choose shapes the tax cost of your Brazilian subsidiary for years. Two regimes are relevant for most foreign-owned companies: Lucro Presumido and Lucro Real. The simplified Simples Nacional regime is generally not an option for a company held by a foreign legal entity, so it is left out here.
The basic difference
Lucro Presumido applies a fixed presumption percentage to gross revenue to determine the taxable profit for IRPJ and CSLL, whatever the real profit is. It is available to companies with gross revenue up to R$78 million in the previous calendar year and not otherwise required to use Lucro Real. Lucro Real taxes the accounting profit adjusted by the tax rules, has no revenue ceiling, and is mandatory for some activities, for example financial institutions.
What to compare
- Margin. If your real margin is higher than the presumed one, Lucro Presumido tends to cost less. If margins are low or you have losses, Lucro Real can be cheaper.
- Cost structure. Heavy deductible expenses and input credits favour Lucro Real. Thin cost bases favour Presumido.
- PIS and COFINS. They are calculated differently in each regime, which changes the comparison for trading companies and for service companies.
- Complexity. Lucro Real demands fuller bookkeeping and more filings.
A recent change to be aware of
Supplementary Law 224/2025 introduced, from 2026, an extra 10 percent on the presumption for the part of annual gross revenue above R$5 million, tested quarterly against R$1.25 million. Companies near that level should model both regimes again.
How we work
We run a simple model of both regimes on your activity and expected revenue and show the tax cost side by side. This is part of our tax regime analysis.
General information, not tax advice for your case. Figures reflect the sources below and should be checked against the current rules.