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Among the most complex and sensitive topics in contemporary Tax Law is the exemption from ITBI (Real Estate Transfer Tax), particularly in capital contribution transactions for companies in the real estate sector.
A major controversy arises regarding the application of Article 156, §2, I of the Federal Constitution, which addresses tax immunity in the transfer of assets and rights to the equity of legal entities. While the Constitution grants municipalities the power to impose ITBI, it also establishes limits on this authority through tax immunities.
The confusion surrounding the interpretation of this provision was initially clarified years ago when the Federal Supreme Court (STF) ruled on the issue in a case of general repercussion. However, the decision in Topic 796 caused considerable debate in the tax law sphere. The ruling determined that ITBI does not apply to real estate assets incorporated into a legal entity’s capital stock or to transfers of assets and rights resulting from mergers, incorporations, spin-offs, or the dissolution of legal entities. In other words, the Court granted unconditional ITBI immunity in such cases.
The controversy stemmed from the fact that the core issue in Topic 796 was not directly ITBI immunity itself, but rather whether the tax should apply to the portion of a property’s value exceeding the contributed capital stock. This distinction has led to ongoing uncertainty.
Currently, the Supreme Court is once again reviewing the issue under Topic 1,348 of General Repercussion, a decision that will have significant implications for the real estate market and the taxation of property transfers across the country.
According to Camila Resende, a tax law specialist at Elias, Matias Advogados, the courts have consistently ruled in favor of taxpayers, recognizing unconditional tax immunity based on the Supreme Court’s prior interpretation.
Until a final decision is reached that provides greater legal certainty for taxpayers, Camila emphasizes the importance of strategic and well-structured corporate and estate planning to mitigate potential risks for companies.
https://www.eliasmatias.com/newsletter/142/Argumento-142.pdf