Alana Aiche do Carmo Dahrouj
Lawyer at Marcos Martins Advogados
The São Paulo State Court of Justice, in a recent decision, recognized that the calculation basis to be considered for ITCMD purposes is the property’s sale value applied in the IPTU calculation.
The decision honored the principle of legality, which states that no tax shall be instituted or increased except by law, ruling out the practice of applying the reference venal value (market value), which is generally higher.
In the state of São Paulo, the practice stems from legislation issued in 2000 which established that the calculation basis to be used is the market value. Subsequently, a decree was also issued in an attempt to change the ITCMD base to the same reference value used for ITBI.
However, this rule does not stand because it was issued by decree, which offends the principle of legality that requires such arrangements to be laid down by law.
Therefore, when the ITCMD is paid, in order to secure the right to have the property’s market value applied, corresponding to that used in the IPTU base, it is necessary to apply to the courts, by filing the respective lawsuit. As well as to refund amounts paid unduly.
Marcos Martins Advogados makes its tax team available to answer any questions on the subject.
