Menu
  • Locations
  • About Us
  • Services
  • Experts
  • News
  • Knowledge
  • Culture & Career
  • Locations
  • Search
  • Press
  • Events & Webinars
  • CI Guide
  • Contact
  • Albania
  • Angola
  • Argentina
  • Armenia
  • Australia
  • Austria
  • Bangladesh
  • Belarus
  • Belgium
  • Benin
  • Bolivia
  • Bosnia & Herzegovina
  • Brazil
  • Bulgaria
  • Burkina Faso
  • Burundi
  • Cambodia
  • Cameroon
  • Canada
  • Chile
  • China
  • Colombia
  • Costa Rica
  • Croatia
  • Cyprus
  • Czech Republic
  • Denmark
  • Dominican Republic
  • Ecuador
  • Egypt
  • El Salvador
  • Estonia
  • Finland
  • France
  • Georgia
  • Germany
  • Ghana
  • Gibraltar
  • Greece
  • Guatemala
  • Guinea
  • Honduras
  • Hong Kong
  • Hungary
  • Iceland
  • India
  • Indonesia
  • Iran
  • Iraq
  • Ireland
  • Israel
  • Italy
  • Ivory Coast
  • Japan
  • Kazakhstan
  • Kenya
  • Korea
  • Kyrgyzstan
  • Laos
  • Latvia
  • Lithuania
  • Luxembourg
  • Macao
  • Macedonia
  • Madagascar
  • Malaysia
  • Mali
  • Malta
  • Mauritius
  • Mexico
  • Moldova
  • Mongolia
  • Montenegro
  • Morocco
  • Mozambique
  • Myanmar
  • Nepal
  • Netherlands
  • New Zealand
  • Niger
  • Nigeria
  • Norway
  • Pakistan
  • Panama
  • Paraguay
  • Peru
  • Philippines
  • Poland
  • Portugal
  • Puerto Rico
  • Romania
  • Russia
  • Rwanda
  • Saudi Arabia
  • Senegal
  • Serbia
  • Seychelles
  • Singapore
  • Slovakia
  • Slovenia
  • South Africa
  • Spain
  • Sri Lanka
  • Sweden
  • Switzerland
  • Taiwan
  • Tanzania
  • Thailand
  • Togo
  • Trinidad and Tobago
  • Tunisia
  • Turkey
  • Turkmenistan
  • Uganda
  • Ukraine
  • United Arab Emirates
  • United Kingdom
  • Uruguay
  • USA
  • Uzbekistan
  • Venezuela
  • Vietnam
  • Zambia
  • About Us
  • Our CEO
  • Our Board
  • Our Global Executive Team
  • Quality, Process & Risk Management
  • Corporate Tax
  • Customs
  • Financial Services
  • Global Mobility
  • Indirect Tax
  • International Corporate Tax
  • Mergers & Acquisitions (M&A)
  • Private Clients & Family Office
  • Sustainability & ESG in Taxation
  • Tax Controversy
  • Tax Technology
  • Transfer Pricing & Valuation
  • Real Estate
  • Latest News
  • Pillar Two - Global Minimum Tax
  • Brochures
  • Newsletters
  • Newsletter Subscription
  • Surveys & Studies
  • The Digital Tax Law Center (DTLC)
  • The European Tax Law Center (ETLC)
  • Climate Protection, Green Tax & Energy
  • Sustainability & ESG in Taxation
  • Tax Loss Carryback
  • Real Estate Guide
  • Tax and Investment Facts CEE
  • Assignments to Europe & Asia Pacific
  • Assignments to the Americas
  • Culture and Leadership
  • Diversity
  • WTS Global Academy
  • Career
  • Your Development
  • Jobs
  • Pillar Two Team
  • Press
  • Events & Webinars
  • CI Guide
  • Contact
WTS worldwide
  • Albania
  • Angola
  • Argentina
  • Armenia
  • Australia
  • Austria
  • Bangladesh
  • Belarus
  • Belgium
  • Benin
  • Bolivia
  • Bosnia & Herzegovina
  • Brazil
  • Bulgaria
  • Burkina Faso
  • Burundi
  • Cambodia
  • Cameroon
  • Canada
  • Chile
  • China
  • Colombia
  • Costa Rica
  • Croatia
  • Cyprus
  • Czech Republic
  • Denmark
  • Dominican Republic
  • Ecuador
  • Egypt
  • El Salvador
  • Estonia
  • Finland
  • France
  • Georgia
  • Germany
  • Ghana
  • Gibraltar
  • Greece
  • Guatemala
  • Guinea
  • Honduras
  • Hong Kong
  • Hungary
  • Iceland
  • India
  • Indonesia
  • Iran
  • Iraq
  • Ireland
  • Israel
  • Italy
  • Ivory Coast
  • Japan
  • Kazakhstan
  • Kenya
  • Korea
  • Kyrgyzstan
  • Laos
  • Latvia
  • Lithuania
  • Luxembourg
  • Macao
  • Macedonia
  • Madagascar
  • Malaysia
  • Mali
  • Malta
  • Mauritius
  • Mexico
  • Moldova
  • Mongolia
  • Montenegro
  • Morocco
  • Mozambique
  • Myanmar
  • Nepal
  • Netherlands
  • New Zealand
  • Niger
  • Nigeria
  • Norway
  • Pakistan
  • Panama
  • Paraguay
  • Peru
  • Philippines
  • Poland
  • Portugal
  • Puerto Rico
  • Romania
  • Russia
  • Rwanda
  • Saudi Arabia
  • Senegal
  • Serbia
  • Singapore
  • Slovakia
  • Slovenia
  • South Africa
  • Spain
  • Sri Lanka
  • Sweden
  • Switzerland
  • Taiwan
  • Tanzania
  • Thailand
  • Togo
  • Trinidad and Tobago
  • Tunisia
  • Turkey
  • Turkmenistan
  • Uganda
  • Ukraine
  • United Arab Emirates
  • United Kingdom
  • Uruguay
  • USA
  • Uzbekistan
  • Venezuela
  • Vietnam
  • Zambia
  • About Us
    About Us

    Here you will find more information on our organization’s structure, experts and global reach.

    Read more
    About Us Our CEO Our Board Our Global Executive Team Quality, Process & Risk Management
  • Services
    Services
    Read more
    Corporate Tax Customs Financial Services Global Mobility Indirect Tax
    International Corporate Tax Mergers & Acquisitions (M&A) Private Clients & Family Office Sustainability & ESG in Taxation Tax Controversy
    Tax Technology Transfer Pricing & Valuation Real Estate
  • Experts
    Experts

    With a representation in over 100 countries, our team offers local expertise on a global scale. Learn more about our experts.

    Read more
  • News
    News

    Find here the latest news 

    Read more
    Latest News
  • Knowledge
    Knowledge
    Read more
    Pillar Two - Global Minimum Tax Brochures Newsletters Newsletter Subscription Surveys & Studies
    The Digital Tax Law Center (DTLC) The European Tax Law Center (ETLC) Climate Protection, Green Tax & Energy Sustainability & ESG in Taxation Tax Loss Carryback
    Real Estate Guide Tax and Investment Facts CEE Assignments to Europe & Asia Pacific Assignments to the Americas
  • Culture & Career
    Culture & Career

    The WTS Global Academy - Bringing value to the whole

    Read more
    Culture and Leadership Diversity WTS Global Academy Career Your Development
    Jobs
  • Locations
    Locations
    Read more
  • Search
01.04.2021

Brazil: Tax on donations and inheritance from abroad is unconstitutional

In accordance with the Brazilian Federal Constitution, States and the Federal District are the ones allowed to collect the tax on goods and rights received as inheritance and gifts, known as the Tax on Causa Mortis Transmission and Donation (ITCMD).

As a rule, the ITCMD is owed, by the beneficiary of the donation or heir, to the Federal District or the Brazilian State where the donor is located in or the deceased was domiciled in or, in the case of real estate, to the State where the property is located.

However, since the 1988 Federal Constitution, it was arguable whether States and the Federal District could demand the payment of ITCMD in cases of donations made by a donor residing abroad and inheritances when the deceased had assets, resided abroad or had his probate processed abroad. This is because the Federal Constitution expressly establishes that, for these cases, the collection of ITCMD was subject to regulation by Supplementary Federal Law (article 155, paragraph 1, III), which to date has not been enacted.

In view of the inaction of the Legislative Power, many States and the Federal District made use of another provision of the Federal Constitution itself to enact State laws (as opposed to Supplementary Federal Law) and charge the ITCMD on donations and inheritances received from abroad.

The debate between States and the Federal District, on one side, and taxpayers, on the other, was brought to the attention of the Federal Supreme Court (STF), which is responsible for judging constitutional matters in Brazil. On March 1st, 2021, the STF decided by a majority of votes that States and the Federal District would not be allowed to institute the collection of ITCMD for cases of donations and inheritances from abroad without the appropriate Supplementary Federal Law to regulate the matter.

The decision significantly affects and reduces the taxation of succession and family estate planning involving a donor domiciled abroad or inheritance which probate is carried out abroad and beneficiaries in Brazil since, specifically in these cases, the taxpayer will be protected from the taxation of the “gift and inheritance tax”, which can reach up to 8% of the property’s assessed value.

It is worth mentioning that, as on other occasions, the STF adjusted the effects of its decision, which will be valid only as of the publication of the STF decision (ex nunc). However, lawsuits pending judgement on the date of the publication of the STF decision and discussing (1) the State to which the taxpayer must pay the ITCMD, considering the occurrence of double taxation, and (2) the validity of the ITCMD charge that has not previously been paid by the taxpayer, will also benefit from the STF decision.

On the other hand, those who (i) are discussing the non-payment of the ITCMD before administrative courts and (ii) have already paid the ITCMD and have filed lawsuit to claim its refund will not benefit from the STF decision.

It is important to note that the STF decision does not reach donations of assets located abroad made by a person domiciled in Brazil, in which case the ITCMD will still be levied in accordance with the law of the donor’s State of residence or the Federal District.

Finally, given the impact of the STF decision on States’ and Federal District’s finances, a Bill of Supplementary Law regulating the ITCMD on donations and inheritance from abroad has already been submitted to the analysis of the Brazilian Congress.

Tax on donations and inheritance from abroad is unconstitutional
Download PDF
Articles you might be interested in

This month marks five years of VAT in the UAE. This document is an excellent report from Dhruva Advisors LLP on how VAT regulations evolved in the UAE, what the challenges are and what the future for VAT will bring.

WTS Dhruva: Five Years of VAT in the UAE - Evolution, Challenges, Future
Read more

Our webinar focusses on the Safe Harbours published by the OECD (interim and permanent) and discusses how these OECD Safe Harbours will impact Pillar Two Compliance Readiness projects.

Webinar: Pillar Two - Deep Dive OECD Safe Harbours
Read more

The draft legislation provides for regulations to be introduced that would require taxpayers to produce (and provide upon request) TP documentation in a specified format in line with the OECD recommended approach (such as Master file and Local file). In addition, HM Revenue & Customs proposed the introduction of a Summary Audit Trail. The UK had previously implemented the Country-by-Country Reporting requirement.

Draft Legislation on the UK TP Documentation Requirements
Read more

Get in contact

If you have any questions about WTS Global or our global services, please get in touch.
We will respond to you as soon as possible.

Contact
About Us
  • About Us
  • Our CEO
  • Our Board
  • Our Global Executive Team
  • Quality, Process & Risk Management
Services
  • Corporate Tax
  • Customs
  • Financial Services
  • Global Mobility
  • Indirect Tax
  • International Corporate Tax
  • Mergers & Acquisitions (M&A)
  • Private Clients & Family Office
  • Sustainability & ESG in Taxation
  • Tax Controversy
  • Tax Technology
  • Transfer Pricing & Valuation
News
Knowledge
  • Pillar Two - Global Minimum Tax
  • Brochures
  • Newsletters
  • Surveys & Studies
  • The Digital Tax Law Center (DTLC)
  • VAT Update for the Digital Economy
  • The European Tax Law Center (ETLC)
  • Tax Loss Carryback
  • Real Estate Guide
Culture & Career
  • Culture and Leadership
  • Diversity
  • WTS Global Academy
  • Career
  • Your Development
  • Jobs
Exclusive Cooperation With
© 2023 WTS Company Information Data Protection Disclaimer