The Tax Reform Bill is in the regulatory phase and already has some new features regarding the Tax on the Transfer of Goods or Rights (ITCMD). Currently before the Chamber of Deputies, the Complementary Bill – PLP 108/24, which provides, among other things, for the administrative tax process for the Tax on Goods and Services (IBS), also provides for substantial changes in the application of the ITCMD by the states, directly influencing the transfer of assets.
Although the bill does not change the maximum rate determined by the Federal Senate, which is currently 8%, there are proposals to raise this ceiling to 16%, which could have a considerable impact.
As a result, the need for effective succession planning while you are still alive, through the current law, becomes more pressing. For families that own their own businesses or enterprises, the measure is even more relevant. By choosing appropriate legal instruments, such as donating assets to heirs or creating family holding companies, it is possible to considerably reduce the amounts that have to be paid out, preserving a larger portion of the family assets accumulated over the years.
In such cases, one of the objectives is also to avoid the company being broken up as a result of succession conflicts. The measure enables the orderly and gradual transfer of business management and ownership to the next generations, guaranteeing the continuity and sustainability of the enterprise.
In addition, the so-called family holding companies also avoid the need to open inventories to share out the assets among the heirs, which usually not only increase the costs incurred, but also prolong the time it takes to finalize the sharing.
For the time being, PLP 108/24 introduces a progressive taxation system for the ITCMD, giving states and the Federal District freedom to set the applicable rates.
Another change refers to the basis for calculating the tax, especially in transfers involving quotas or shareholdings. The new model stipulates that the calculation basis will be the market value of the asset or right transferred, with possible adjustments according to state legislation.
For shares listed on the stock exchange, the market price will be used. In other cases, the valuation must take into account at least the market value of the companies’ book equity plus the valuation of goodwill.
ITCMD will also be levied on PGBL and VGBL pension plans. The PLP determines that insurance, financial and pension institutions will be responsible for withholding the tax in the event of the transfer or donation of assets/rights under their administration. The responsibility for paying the ITCMD will be subsidiary to the taxpayer if the institutions fail to withhold it.
In addition, the bill addresses the issue of assets and rights in trust, treating them as belonging to the settlor until their death. In this case, the transfer of the assets will be considered causa mortis, while the distribution in life will be treated as a donation, attracting ITCMD taxation.
The place of collection of the tax in the case of causa mortis will be changed to the state of domicile of the deceased, and no longer where the inventory or probate of the assets is being processed. This change seeks to standardize the collection of ITCMD for both inheritances and donations.
Another point that drew a lot of attention in the PLP concerns the regulation of the levying of ITCMD on the assets of people living abroad. In previous discussions, the STF had already stated that the tax could only be levied in these situations by means of specific complementary laws. With the PLP, this regulation would be removed, and it would be up to the states and the Federal District to issue new laws to levy ITCMD on the transfer of assets owned by people resident abroad.
However, the point of attention is any laws already enacted by the states and the Federal District aimed at charging ITCMD on transfers involving foreign residents, since they may be considered unconstitutional, considering that they were enacted before the issue was regulated by a complementary law. It is worth remembering, at this point, that the Constitutional Amendment that approved the tax reform created a kind of “transitional rule” for charging the tax in these cases, until a complementary law was enacted, and a careful analysis of each situation is required in order to verify the legitimacy of the charge.
Faced with the new scenario proposed by PLP 108/24, which reflects significant changes in the general rules governing ITCMD taxation, leading to a significant increase in taxation in these operations, it is crucial that taxpayers organize themselves properly and soon, opting for the most beneficial legal instruments when carrying out their succession.
