Brazilian Federal Revenue Details New Asset Regularization Regime with Reduced Tax Rates

Federal Revenue Implements New Asset Regularization Program

The Brazilian Federal Revenue Service (RFB) has officially detailed a new special regime for individuals and legal entities to update the value of assets held both in Brazil and abroad. This initiative, known as the Special Regime for Updating and Regularizing Assets (REARP), was established by Law No. 15,265/2025, published on November 21, 2025. The RFB's rule, issued on December 24, 2025, outlines the procedures for adherence, offering taxpayers an opportunity to regularize their financial positions with significantly reduced income tax rates.

Key Provisions and Reduced Tax Rates

The REARP allows for the updating of asset values declared in Brazil and abroad to their market value, provided these assets were acquired on or before December 31, 2024. The regime applies to a broad range of assets, including movable and immovable property, and is open to taxpayers residing in Brazil whose assets are declared in their most recent Annual Income Tax Return, as well as businesses with assets recorded in their non-current assets section as of December 31, 2024.

A key feature of this new regime is the provision of reduced income tax rates on the appreciation of these assets:

• For individuals, the difference between the current value and the acquisition cost of the asset will be subject to a final income tax rate of 4%.
• For legal entities, the difference between the asset's value in non-current assets as of December 31, 2024, and its market value will be taxed through Corporate Income Tax (IRPJ) at a rate of 4.8% and Social Contribution on Net Profit (CSLL) at a rate of 3.2%.

The RFB has clarified that the amounts resulting from this update cannot be incorporated into the asset's cost for calculating depreciation, amortization, or depletion.

Deadlines and Application Process

To participate in the REARP, taxpayers must submit a specific declaration called the Declaration of Option for the Special Asset Update Regime (Deap). Access to the Deap feature will be available via the RFB's online service, e-CAC, starting January 2, 2026. The deadline for submitting this declaration is February 19, 2026, at 23:59:59 PM Brasília time. The tax due must be paid by February 27, 2026, either in a single installment or in up to 36 monthly installments.

Broader Context of Asset Regularization Efforts

This new regime follows previous efforts by the Brazilian government to encourage asset regularization. In December 2023, Law No. 14,754/2023 came into effect, primarily targeting the taxation of investments held abroad by individuals, introducing a 15% tax rate on foreign income and offering an option to update foreign assets to market value as of December 31, 2023, with an 8% tax on the appreciation.

More recently, Law No. 14,973/2024, published on September 16, 2024, established the Special Regime for the General Regularization of Foreign Exchange and Tax Assets (RERCT-Geral). This program allowed individuals and legal entities to regularize lawful assets, both domestic and foreign, that were previously undeclared or incorrectly declared, based on their value as of December 31, 2023. The RERCT-Geral involved a 15% income tax plus a 100% penalty on the tax, totaling 30% of the asset's value, with a deadline of December 15, 2024.

The REARP, with its notably lower tax rates, presents a distinct opportunity for taxpayers to align their asset declarations with current market values and comply with tax regulations.