ADVANCING THE BILL PROVIDING FOR THE REDUCTION OF THE ITCMD IN SÃO PAULO

On December 21st, the Legislative Assembly of the State of São Paulo (“ALESP”) approved, in an extraordinary session, Bill no. 511/2020 (”PL”), whose author is deputy Frederico Braun d’Avila of the Social Liberal Party (“PSL”).

The PL aims to reduce the rate of the Causa Mortis Transfer and Donation Tax (“ITCMD”) in the state of São Paulo, which rate is currently 4% and, as provided in the PL, would be reduced to 1% in causa mortis transmissions (transfer of assets in cases of death) and 0.5% in donations.

As next steps, the PL will be sent for sanction by the Governor of the State of São Paulo, who will have a period of 15 business days to approve or reject the PL.

If approved, the PL will come into force on the same day of its publication, since it is a tax reduction and, therefore, does not require a waiting period to entering into force.

In case of total or partial veto, the PL will return to ALESP for consideration of the reasons presented by the governor.

BILL PROVIDES THE AUTOMATIC TAXATION OF OFFSHORES PROFITS HELD BY INDIVIDUALS.

The Finance and Taxation Committee of the Chamber of Deputies approved Bill no. 3,489/2021 (“PL 3,489/21”) which proposes the creation of presumed taxation of profits (“CFC rules”) of companies located in a country or dependency with favored taxation or benefited by a privileged tax regime at progressive rates of up to 27.5 %.

As next steps, the Bill must be approved both by the Constitution, Justice, and Citizenship Commission (“CCJC”) and by the Federal Senate and subsequently sanctioned by the President of the Republic to enter into force.

Wealth Planning Team – Abe Advogados