The edition of Law 13,970/19, published on December 27, 2019, with the introduction of article 11-A in Law 10,931/04, which provides for the segregate estate of real estate developers among others, ended the doubt about the form and extension of the application of the Special Taxation Regime – RET for the revenues of developers arising from sales of real estate properties occurring after the completion of the work. Thus, there will be greater security for developers and for taxpayers who have opted for such a regime.
The provision in question is restrictive in determining that the STR will be applied until full receipt of the sales value of all the units comprising the development memorial registered with the competent real estate registry, regardless of the date they are sold, and in the case of construction contracts, until full receipt of the value of the respective contract.
Real estate developers that opt for the STR, in relation to the development affected by such regime, will be subject to taxation of their monthly income through a rate of 1% for social housing projects (Minha Casa, Minha Vida) and 4% for other developments, encompassing the unification of the following taxes and contributions: IRPJ, CSLL, PIS/Pasep and COFINS.
Prior to the enactment of this law, there was some doubt about the extension of the tax incentive consisting of the RET for real estate sold after the completion of the construction. This was due to the divergent manifestations of the Tax Authorities regarding the same matter, which generated legal uncertainty in the real estate sector. With the legislation, it is hoped that the issue will be pacified and resolved.
Once the STR option has been formalized by the developer, all operating income earned by the developer and linked to the development must be taxed under the special regime, even that arising from the sale of real estate after the work has been completed.
The Real Estate and Tax Law team at De Luca, Derenusson, Schutoff & Advogados – DDSA is at your entire disposal for further clarifications and assistance in cases involving this matter.