The Brazilian Estate and Gift Tax (ITCMD) has been thoroughly present in the media during the past few weeks, be it because of recent case law revisions brought about by new jurisprudence[1], or by the onset of major investigations on ITCMD tax evasion.

On the matter of case law, São Paulo State Treasury has decided that the up-payment of stock through the transfer of Real Estate at “cost-value” would now be subject to ITCMD on the basis that “it could be understood as a donation to the other company partners” – which is a case law reversal that many deem illegal.

On the judicial level, the Supreme Court is in the midst of judging whether the States can legally tax donations/inheritances received abroad, whereas the reporting judge has decided that, although it is unconstitutional to tax such endowments, only future ones would be exempt due to budgetary reasons.

Notwithstanding such revisions, the São Paulo State Treasury has also undertaken to investigate close to 1,400 allegedly underhanded donations and inheritance transactions with a total joint value exceeding BRL 17 billion.

As the uncertainty levels rise we can surely expect further news on the matter of ITCMD.

Read more about it here.

[1] i.e. the Supreme Court’s Decision No. RE 851.108 and the São Paulo State Inquiry Solution No. 22.070/2020.