Tax and Energy Regulatory Update February 2026

Ex‑tarifário is not a tax incentive: limits of the linear reduction under Complementary Law 224

João Paulo Cavinatto and Rodrigo do Vale, respectively partner and counsel of Lefosse’s Consumption Tax team, comment on the possible application of the “linear reduction” of federal tax incentives provided for in Complementary Law No. 224/2025 to Import Tax rate reductions granted under the ex‑tarifário regime.

Click ​here ​to read it in full.

How energy traders can anticipate the tax reform

João Paulo Cavinatto and Breno Sarpi, both partners in Lefosse’s Tax practice, together with William Machado, product manager at Paradigma Business Solution, discuss the impacts of the tax reform on the energy sector, especially for traders, generators, and companies preparing for market liberalization.

Click ​here ​to read it in full.

Updates on the Consumption Tax Reform

In January 2026, Complementary Law No. 227/2026 (LC 227) was enacted, representing the second phase of regulatory implementation of the Tax Reform. In addition to introducing significant amendments to Complementary Law No. 214/2025—which sets out the general rules for the Goods and Services Tax (IBS), the Contribution on Goods and Services (CBS), and the Selective Tax—the new law also regulated the following topics:

• Establishes the IBS Managing Committee, the body responsible for administering and auditing the tax;
• Regulates the IBS administrative tax procedure;
• Addresses the transition period for the credit balances of the Tax on the Circulation of Goods and Interstate and Intermunicipal Transportation and Communication Services (ICMS); and
• Amends rules related to the Estate and Gift Tax (ITCMD) and the Urban Property Tax (IPTU).

During the same period, the Federal Revenue Service issued a notice reinforcing the mandatory use of the Electronic Tax Domicile as of January 2026 for all legal entities registered with the National Registry of Legal Entities (CNPJ).

For additional information on the Tax Reform and other relevant updates on consumption taxation, please refer to the bulletin from our Consumption Tax team here.

Federal Government reduces federal tax incentives and benefits

On December 26, 2025, Complementary Law No. 224/2025 (LC 224) was published. The law establishes the linear reduction of tax incentives and benefits, sets criteria for their granting, and provides for joint liability of third parties for taxes levied on fixed‑odds betting.

The law establishes a 10% reduction in incentives and benefits related to federal taxes, including the Contribution to the Social Integration Program (PIS) and PIS‑Import, the Contribution for the Financing of Social Security (Cofins) and Cofins‑Import, Corporate Income Tax (IRPJ), Social Contribution on Net Profit (CSLL), Import Tax (II), Excise Tax (IPI), and Employer Social Security Contribution (CPP).

The measure applies to benefits included in the Tax Expenditure Statement of the 2026 Annual Budget Bill, as well as regimes and mechanisms listed in LC 224, such as the Special Regime for the Chemical Industry (REIQ), presumed credits, and rate reductions of PIS, Cofins, IPI, and II used by sectors such as agriculture, food, pharmaceuticals, fuels, among others.

The reduction does not apply to cases expressly excluded by law, such as constitutional immunities, benefits of the Manaus Free Trade Zone (ZFM), zero‑rated basic food basket products, the University for All Program (ProUni), ad rem rates, and other benefits targeting strategic sectors such as information technology and semiconductors.

The Federal Revenue Service issued a Normative Instruction listing benefits excluded from the linear reduction and, on January 27, 2026, released a Q&A document providing practical guidance on the scope of the measure and the application of the 10% reduction, aiming to provide greater legal certainty and uniformity in interpretation.

Click here to access the exclusive guide with full details on the reduction of tax incentives.

Federal Revenue clarifies rules on exclusion of ICMS from the PIS and Cofins tax bases

On January 14, 2026, the Federal Revenue Service issued a Private Letter Ruling clarifying aspects related to the exclusion of ICMS from the PIS and Cofins tax bases, in line with the Supreme Federal Court’s understanding in Theme No. 69.

According to the Revenue Service, there is no legal provision for automatic reimbursement of credits resulting from this exclusion, although such amounts may constitute undue or overpaid taxes, subject to refund. In the non‑cumulative regime, excluding ICMS may increase the generation of bookkeeping credits, whose refundability will depend on whether they fall within applicable regulatory provisions.

Additionally, in cases where a final court decision exists and the taxpayer opts for offsetting the credits, prior validation of these amounts by the Federal Revenue is required.

Federal Revenue defines the scope of Reidi for services in photovoltaic park projects

The Federal Revenue issued a Private Letter Ruling clarifying which goods and services related to the construction of photovoltaic parks may benefit from the Special Incentive Regime for Infrastructure Development (Reidi), which grants suspension of PIS and Cofins on acquisitions for infrastructure works incorporated into fixed assets.

According to the ruling, only goods and services directly applied to infrastructure works of projects duly qualified under Reidi fall within the benefit. Services relevant to project feasibility but not directly applied to the construction are excluded.

In this context, vegetation management and clearing services directly related to preparing the site for installation of the photovoltaic park were considered eligible. Conversely, services such as implementation of environmental plans and programs, compensatory planting, and environmental consulting do not qualify, even if relevant to the project, because they are not directly applied to the infrastructure works.

Alagoas grants ICMS tax base reduction for electricity transmission concessionaires

Through a decree published on January 22, 2026, the State of Alagoas amended the ICMS Regulations to introduce a reduction of up to 90% in the ICMS tax base on imports and interstate acquisitions—specifically regarding the tax differential—of goods, parts, machinery, and equipment intended for companies exclusively operating as electricity transmission concessionaires for the implementation of their networks.

Eligibility for the benefit is subject to several requirements, including the taxpayer not using ICMS credits related to the import or interstate operation and not having outstanding debts enrolled in the state’s overdue tax registry, except for debts with suspended enforceability.

Rio de Janeiro extends deadline for submission of the December 2025 Devec

On January 22, 2026, the State of Rio de Janeiro issued a regulatory act extending the deadline for submitting the Declaration of the Value of Acquisition of Electricity in the Free Contracting Environment (Devec), relating to transactions carried out in December 2025.

With the change, taxpayers now have until January 15, 2026, to file the ancillary obligation with the state tax authorities.

This content is part of the Energy Bulletin for February 2026, bringing together the main regulatory and sector highlights of the period. This material is for informational purposes only. Our Telecommunications team is available to provide specialized legal advice.