MBG Advogados

Extraordinary Appeal No. 1,495,108/SP: Real Estate Transfer Tax on Capital Contributions to Real Estate Companies (STF Topic 1.348)

The Full Bench of the Supreme Court (Supremo Tribunal Federal – STF) recently addressed the application of the Real Estate Transfer Tax (Imposto de Transmissão de Bens Imóveis – ITBI) to the transfer of real estate as a capital contribution, in accordance with the immunity provided under Article 156, item II, of the Brazilian Federal Constitution.

The key issue centers on whether this immunity also applies when the recipient company’s primary business involves the purchase, sale, rental, or leasing of real estate.

Case law on this matter has been controversial, with some rulings favoring taxpayers and others supporting the tax authorities.

The Supreme Court has yet to decide on the merits of the case.

However, the ruling will have general repercussions, meaning it must be followed by all courts. The final decision on the matter will have a significant impact on succession and wealth planning.

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