Directly responsible for a significant share of GDP and exports, agribusiness is one of the central pillars of the Brazilian economy.
However, the excessive complexity of the current tax system can pose a challenge for the sector. In this regard, efficient tax planning that takes advantage of the numerous tax avoidance opportunities available to the segment is one of the key strategies to consider in ensuring the competitiveness and financial sustainability of rural businesses.
Below, we highlight five strategic points that can help minimize the tax burden on agribusinesses:
1. Leveraging Tax Incentives for Investments in Technology and Sustainability: To foster the sector, the Federal Government and many states offer incentives for companies that invest in technology, innovation, and sustainable practices, including agribusiness. For example, the “Lei do Bem” (Law 11.196/2005) allows companies to deduct research and development expenses from the Income Tax and Social Contribution on Net Profit (CSLL) tax base. Additionally, states where agribusiness is the primary economic driver grant ICMS (Value-Added Tax) exemptions for equipment and inputs used in renewable energy, irrigation, and environmental management projects.
2. Structuring Export Operations with Tax Benefits: Exports of agricultural products are exempt from ICMS, PIS, and COFINS, which in itself provides a strong incentive for agribusiness companies to export their products. Furthermore, the suspension or exemption of taxes on imported inputs used to produce goods for export—commonly known as the “Drawback” mechanism—can be a crucial cost-reduction tool for agribusiness companies. In this sense, companies that export regularly should structure their operations to maximize these benefits.
3. Succession Planning and Tax Immunity on Rural Properties: Succession planning is essential to prevent the fragmentation of rural properties and the consequent loss of their productive capacity. Strategies such as the establishment of rural holding companies and usufruct arrangements can be used to optimize and reduce the costs of transferring rural properties, while minimizing the tax burden on inheritances and donations. From a tax perspective, the Federal Constitution guarantees tax immunity from the Rural Land Tax (ITR) for properties that fulfill their social function, which is linked to productivity and proper land use, as defined by the Land Statute (Law 4.504/1964).
4. Recovery of PIS and COFINS Tax Credits on Agricultural Inputs: Agribusiness companies, under Laws No. 10.833/2003 and 10.637/2002, can claim PIS and COFINS tax credits on inputs such as fertilizers, pesticides, seeds, and animal feed. However, many business owners are unaware of this benefit, which can significantly reduce operational costs. It is essential to ensure the correct classification of inputs to avoid misinterpretations of the concept of “essentiality,” which could lead to disputes with tax authorities.
5. Strategies for Tax Optimization: The establishment of an agribusiness on rural property offers tax advantages, such as the inclusion in special tax regimes (Presumed Profit and Simples Nacional), exemptions, tax credits, and deductions. Additionally, the integration of production and industrialization reduces logistics costs and indirect taxes, facilitating access to government incentives and Export Processing Zones.
Among productive sectors, agribusiness may offer the most opportunities for tax avoidance and reduction of the tax burden on taxpayers. This reality goes beyond mere tax reduction; it is about pursuing efficiency, competitiveness, and sustainability in the sector. However, it is crucial that any decision aimed at minimizing the tax impact on a company’s activities is solidly backed by current legislation, sound tax practices, and prevailing legal interpretations.
