| Income and social contribution taxes |
18. Income and social contribution taxes 18.1. Deferred taxes Deferred income and social contribution tax assets and liabilities are offset when there is a legal right to offset tax credits against tax liabilities, and provided that they refer to the same tax authority and the same legal entity. The fiscal year (which ends on December 31) for income tax and social contribution calculation purposes is different from the accounting year adopted by the Company, which ends June 30 of each year. Deferred income tax and social contribution tax assets and liabilities as of June 30, 2026, and 2025 are as follows: | | | 2026 | | | 2025 | | | Assets | | | | | | | | Tax carryfoward losses | | | 268,866 | | | | 205,319 | | | Biological assets | | | 78 | | | | - | | | Financial lease | | | 53,498 | | | | 43,653 | | | Contingency, bonuses and fair value | | | 31,708 | | | | 30,747 | | | Derivative financial instruments | | | 334 | | | | 560 | | | Allowance for expected credit losses | | | 726 | | | | 726 | | | Difference in cost of farms | | | 170 | | | | 170 | | | Share-based incentive plan (ILPA) | | | 1,462 | | | | 1,085 | | | Provision of other accounts payable and receivable | | | 1,357 | | | | 2,798 | | | Impairment of investment | | | 1,654 | | | | 1,654 | | | Subscription warrant | | | - | | | | 43 | | | | | | 359,853 | | | | 286,755 | | | Liabilities | | | | | | | | | | Noncurrent | | | | | | | | | | Biological assets | | | 15,124 | | | | 25,149 | | | Present value adjustment and other provisions | | | 7,311 | | | | 7,138 | | | Derivative financial instruments | | | 3,145 | | | | 2,950 | | | Surplus on investment | | | 1,733 | | | | 1,733 | | | Costs of transactions | | | 2,126 | | | | 1,949 | | | Provision of residual value and useful life of PPE assets | | | 9,652 | | | | 7,602 | | | Accelerated depreciation of assets for rural activity | | | 105,275 | | | | 92,428 | | | Deferred taxes on surplus value of PPE and investment property – Acquisition of Agrifirma | | | 18,426 | | | | 18,541 | | | | | | 162,792 | | | | 157,490 | | | Net balance | | | 197,061 | | | | 129,265 | |
The balances are presented in the balance sheet as follows: | Net deferred assets | | | 229,292 | | | | 166,145 | | | | 88,031 | | | Net deferred liabilities | | | (32,231 | ) | | | (36,880 | ) | | | (19,719 | ) | The net change in deferred income tax is as follows: | At June 30, 2024 | | | 68,312 | | | | | | | | | Tax carryforward losses | | | 41,966 | | | Adjustments in biological assets and agricultural products | | | 11,681 | | | Financial lease | | | 6,097 | | | Provisions for contingency and fair value | | | 1,831 | | | Derivative financial instruments | | | (21,665 | ) | | Costs of transactions | | | 669 | | | Provision for other accounts payable and receivable | | | 2,125 | | | Accelerated depreciation of assets for rural activity | | | (10,261 | ) | | Deferred taxes on goodwill | | | (135 | ) | | Share-based incentive plan (ILPA) | | | 473 | | | Temporary differences related to PPE | | | (625 | ) | | Acquisitions - business combination (Note 2.3) | | | 28,797 | | | At June 30, 2025 | | | 129,265 | | | | | | | | | Tax losses | | | 63,547 | | | Adjustments in biological assets and agricultural products | | | 10,103 | | | Financial lease | | | 9,845 | | | Provisions for contingency and fair value | | | 788 | | | Derivative financial instruments | | | (421 | ) | | Costs of transactions | | | (177 | ) | | Provision for other accounts payable and receivable | | | (1,441 | ) | | Accelerated depreciation of assets for rural activity | | | (12,847 | ) | | Fair value of other significant liabilities | | | (43 | ) | | Deferred taxes on goodwill | | | 115 | | | Share-based incentive plan (ILPA) | | | 377 | | | Temporary differences related to PPE | | | (2,050 | ) | | At June 30, 2026 | | | 197,061 | | The expected realization of deferred tax assets are as follows: | | | 2026 | | | 2026 | | | 33,359 | | | 2027 | | | 11,220 | | | 2028 | | | 19,199 | | | 2029 | | | 40,316 | | | 2030 to 2035 | | | 255,759 | | | | | | 359,853 | |
18.2. Income and social contribution expenses – reconciliation of statutory to effective rates | | | 2026 | | | 2025 | | | 2024 | | | Income before income and social contribution taxes | | | (147,302 | ) | | | 124,648 | | | | 191,515 | | | Combined nominal rate of income tax and social contribution taxes – % | | | 34 | % | | | 34 | % | | | 34 | % | | | | | 50,083 | | | | (42,380 | ) | | | (65,115 | ) | | | | | | | | | | | | | | | | Share of loss in a Joint Venture | | | (2 | ) | | | (484 | ) | | | (20 | ) | | Management bonus | | | (619 | ) | | | (726 | ) | | | (596 | ) | | Fair value variation of accounts receivable from sale of farms | | | 3,404 | | | | 3,744 | | | | (657 | ) | | Non-deductible expenses | | | (34 | ) | | | (48 | ) | | | (140 | ) | | Net effect of profit taxed abroad | | | - | | | | (107 | ) | | | (307 | ) | | Net effect of subsidiaries taxed whose profit is computed as a percentage of gross revenue (*) | | | 7,755 | | | | 56,057 | | | | 96,914 | | | Other permanent addition/exclusion | | | (3,294 | ) | | | (2,685 | ) | | | 5,273 | | | | | | | | | | | | | | | | | Income and social contribution taxes for the year | | | 57,293 | | | | 13,371 | | | | 35,352 | | | | | | | | | | | | | | | | | Current | | | (10,503 | ) | | | (19,315 | ) | | | (23,474 | ) | | Deferred | | | 67,796 | | | | 32,686 | | | | 58,826 | | | | | | 57,293 | | | | 13,371 | | | | 35,352 | | | Effective tax rate | | | -39 | % | | | 11 | % | | | 18 | % | | (*) | For some real estate agencies, income tax is measured based on the presumed profit regime as a percentage of gross revenue, i.e., income tax is determined on a simplified base to calculate the taxable profit (32% for lease revenues, 8% from sale of farms and 100% for other earnings). This results in taxing the profit of subsidiaries at rate a lower rate than if taxable profit were based on pretax results on the accounting records. |
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