On August 14, 2024, the Chamber of Deputies approved the main text and highlights of Complementary Bill (PLP) 108/2024, which introduces significant changes to the Real Estate Transfer Tax (ITBI) and the Inheritance and Donation Tax (ITCMD). Additionally, it regulates the Management Committee of the Goods and Services Tax (IBS) and its distribution among federal entities.
Key Changes to ITBI:
One of the most notable changes concerns the option now offered to taxpayers to make an advance payment of ITBI at the time of the signing of a purchase and sale agreement for a property.
Previously, this tax was only required at the time of property transfer during the registration at the real estate registry office. With the new wording, municipalities and the Federal District may foresee this optional advance payment, with the possibility of applying a reduced rate for those who choose this early payment. This measure aims to combat the practice of “drawer contracts,” where possession is transferred without proper property registration.
Changes to ITCMD:
In the scope of ITCMD, PLP 108/2024 introduces taxation on the disproportionate distribution of dividends among partners in a company. This change aims to tax the difference between amounts distributed without plausible justification to prevent manipulation in profit distribution that favors certain partners over others.
Additionally, ITCMD will now apply to PGBL and VGBL pension plans, with the caveat that this taxation will only occur if the amounts invested remain in the plans for less than five years.
Participation and Representation in the IBS Management Committee:
Another important issue is the inclusion of representatives from the State, Federal District, and Municipal Procurators in the meetings of the Superior Council of the IBS Management Committee. This inclusion came after mobilization by the National Association of State and Federal District Prosecutors, which had criticized the underrepresentation of public advocacy compared to tax administration.
Next Steps:
After analyzing the highlights, the project will be sent to the Senate. There is an expectation that the vote on PLP 68/2024, which deals with related issues, will occur in November after the mayoral elections.