BRAZIL Trends and Developments Contributed by: Raquel Novais, Marco Behrndt, Daniella Zagari and Clara Gomes, Machado Meyer
Machado Meyer Ed. Seculum II – Rua José Gonçalves de Oliveira No. 116, 5th flor, Itaim Bibi Sao Paulo, Brazil 01453-050 Tel: +55 (11) 3150 7000 Email: bps.mkt@machadomeyer.com.br Web: www.machadomeyer.com.br/en
Introduction: The High-Litigation Environment in Brazil Brazil remains a structurally high-litigation jurisdic - tion, with limited prospects of meaningful short-term change. Recent figures indicate some reduction in the judicial backlog: the Judiciary entered 2026 with approximately 75 million pending cases, the lowest level recorded in the past six years. This improvement, however, must be viewed in context. In 2025, nearly 39.7 million new cases were filed, while approximately 44 million were resolved. These numbers reflect pro - ductivity gains, but also confirm the continued pres - sure placed on the court system. Even excluding stayed or provisionally archived proceedings, the net backlog remained at approximately 58.5 million cases at the end of 2025. More information can be found in Justiça em números 2026/ Conselho Nacional de Justiça . – Brasília : CNJ, 2026. The scale of litigation in Brazil is not merely quantita - tive. It is driven by regulatory complexity, interpretative instability, overlapping institutional competencies, and the widespread judicialisation of economic, regulatory, and institutional disputes. Tax litigation is one of the clearest examples of this dynamic. The stock of tax disputes is estimated to exceed BRL5.6 trillion, equiv - alent to approximately 75% of GDP, compared with an OECD (Organisation for Economic Co-operation and Development) average of around 0.28%. More than four million new tax cases are initiated each year, many arising from tax enforcement proceed - ings brought by public authorities. More information can be found in OECD (2023), OECD Economic Sur - veys: Brazil 2023, OECD Publishing, Paris, https://doi. org/10.1787/a2d6acac-en.
Tax litigation has therefore evolved from a conse - quence of individual disputes into a relevant eco - nomic variable. Legal uncertainty increases the cost of capital, affects long-term investment decisions, and encourages defensive litigation strategies, particularly in highly regulated and tax-intensive sectors. In this environment, effective dispute resolution increasingly depends on co-ordination between administrative and judicial bodies, as well as on the ability of the higher courts and the Administrative Council of Tax Appeals ( Conselho Administrativo de Recursos Fiscais – CARF) to provide consistent and stable guidance. The central challenge remains reducing structural reliance on liti - gation without undermining taxpayers’ defence rights or the predictability required for efficient revenue col - lection. Current Environment: Key Controversies Against this backdrop, several tax controversies have become central to the agendas of taxpayers, tax authorities, and the Judiciary. These matters combine high economic relevance, significant interpretative divergence, and cross-sector effects. Machado Meyer has been actively involved in leading cases before the CARF, the Superior Court of Justice ( Superior Tribunal de Justiça – STJ), and the Supreme Federal Court ( Supremo Tribunal Federal STF). The following topics illustrate how recent precedents, legislative develop - ments, and increasingly restrictive positions adopted by the tax authorities are shaping the current litigation landscape. Goodwill Goodwill amortisation remains one of the most con - tentious issues in Brazilian tax law. Disputes generally
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