Tax on offshore gifts?

A very interesting development is under way at the Supreme Court. As our clients and partners know we have always advocated about the opportunity of setting up an international estate planning with the benefit of not having to pay ITCMD tax on offshore gifts. That is possible because of a loophole in the regulation and with a lot of cases lost by the estates revenue services makint it pretty secure until now.

Sao Paulo estate revenue service lodged an appeal against the judgment of the 6th Public Law Chamber of the São Paulo Court of Justice (TJ-SP) which recognized the right of the taxpayer not be compelled to collect the amount for the gift tax/inheritance tax (ITCMD) on the bequest of a property located in Treviso, Italy, and on the transfer of a sum of money foreign (Euro), both operations carried out in 2005.
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The long-awaited amnesty

Amnesty for whom? That’s an interesting question. We waited a while to finally make our comment on the matter and thus we could see how some legal consultants are seeing the project to implement the RERCT (A special regime to come into tax and currency exchange compliance) to be regulated by the PLS 298/15 or to simplify, a project for capital repatriation. Our vision always has been accompanied by a certain skepticism about the government’s ability to pass such a project with so little political capital as now, but let’s leave that aside for a moment.

The project itself is bound to create a fund for loss compensation with ICMS due to the attempt to finally promote a reform of such a tax to end the fiscal war between the states. Unfortunately as is common in Brazil is an inconsistency to expect a fund that require recurring funding to be powered via a measure that will promote a non-recurring revenue, famous cover the sun with a sieve. But this is not a project design error itself, but the fiscal measures plan.
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