STF has 5 votes for ITBI immunity on capital contribution

The Brazilian Supreme Federal Court has resumed the judgment of Theme 1,348 under the general repercussion system, which discusses whether ITBI immunity on the contribution of real estate assets to share capital depends on the company’s activity.

So far, five Justices have voted in favor of the understanding that the immunity applies regardless of the company’s activity, including in cases involving companies predominantly engaged in real estate activities. Two Justices voted in favor of allowing the tax to be charged in this scenario.

Although the partial vote count is favorable to taxpayers, there is still no final decision. The judgment was suspended after a request for review by Justice Alexandre de Moraes and is expected to resume for the conclusion of the vote and the establishment of the binding thesis.

If the majority understanding prevails, the decision may have relevant impacts on the structuring of family and real estate holding companies, on the assessment of ITBI by municipalities, and on the evaluation of measures to preserve a potential right to recover amounts unduly paid in recent transactions.

The matter requires close monitoring, especially due to the possibility of modulation of the decision’s effects and the need for case-by-case analysis.