It is noticeable that the professionalization of companies has brought a lot of sophistication in business management, with the use of various tools and mechanisms that were previously used only by large economic groups.

In this article we are going to deal with a financial mechanism to protect against risks linked to companies’ assets and liabilities, more specifically the hedge. Our intention here is not to go deeper into hedge mechanisms, but rather to understand how taxation occurs considering the option for Real Profit; very frequent doubt on the part of the taxpayer and which we will try to simplify below.

In a very brief way, we have that the hedge operation aims to protect the assets, rights, obligations inherent to price or rate fluctuations over time. For further details regarding hedge mechanisms, we recommend reading this article. Learn more information about sales tax calculator zip code.

Hedge taxation

That said, we started to talk about how the tax legislation regulated the matter in relation to the incidence, considering that the most important thing is to understand the deductibility of losses resulting from this operation, since the gains will always be taxed.

First, we will analyze the temporal criterion, that is, the moment when the result (gains and losses) should impact the calculation in the Real Profit. In this case, we have that the positive or negative results will be recognized for tax purposes only when they are realized, as determined.

In other words, the results of hedge operations, which are included in the list of operations listed in the mentioned Article 32, should be offered for taxation only when the contract is settled.

However, as we already know, from an accounting point of view, hedge contracts are subject to fair value adjustment, therefore, their variation is recognized in the accounts throughout the term of the contract.

Thus, considering that the results should be taxed only when the contract is concluded, these will be added (in the case of loss) or excluded (in the case of gain) in the calculation of the Real Profit and will only impact the Real Profit when the settlement of the contract.

Having overcome the temporal criterion of offering to tax variations resulting from hedge operations, it is important to understand now the criteria to be observed for the deductibility of losses on this operation.

Transactions carried out for hedging purposes are considered derivative transactions intended exclusively to protect against risks inherent to price or rate fluctuations, when the object of the negotiated contract:

  • is related to the operational activities of the legal entity; and
  • to protect the rights or obligations of the legal entity.

The provision in the caput also applies to hedge transactions carried out in the financial markets or in the future settlement of interest rates, security prices, commodities, exchange rates and indices, provided that they aim at protection of businesses related to the company’s operational activity and are intended to protect the rights or obligations of the legal entity.


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