06/10/2025
In a recent decision, the 1st panel of the Supreme Federal Court (“STF”) upheld a decision by the São Paulo Court of Justice (“TJSP”) dismissing the Tax on Inheritance and Donations (“ITCMD”) on donations coming from abroad.
This topic is not new. In 2021, the STF ruled on Theme No. 825, establishing the thesis that the collection of ITCMD on inheritances and donations from abroad, without complementary law, was unconstitutional. Based on this judgment, Article 4 of Law No. 10,705/2000 of the State of São Paulo—which provided for taxation on foreign donations and inheritances—was deemed unconstitutional in the Direct Action of Unconstitutionality (“ADI”) No. 6830 by the Supreme Court.
The matter resurfaced with new aspects in late 2023 with the promulgation of Constitutional Amendment (“EC”) No. 132/23, which allows states to impose ITCMD on foreign inheritances and donations even without complementary law.
Based on the Amendment, without a new law being enacted (since the cited Article 4 was ruled unconstitutional), São Paulo’s tax authority has been imposing ITCMD on foreign donations and inheritances, using the EC as justification.
As a result, a taxpayer who received foreign donations appealed to the judiciary to avoid the ITCMD tax by the State of São Paulo and won a favorable decision from the 11th Public Law Chamber of the TJSP. São Paulo State’s Treasury appealed this decision to the STF, which upheld the TJSP’s decision, dismissing the ITCMD on the said donations.
At the STF, the case’s rapporteur, Minister Cármen Lúcia, indicated that “the originating court correctly decided there was no legal basis to support the collection of the state tax, making it unfeasible to recognize the tax incidence in this case, even after the issuance of Constitutional Amendment No. 132/2023.”
Although this decision is not yet definitive and does not have binding effect, it signals a positive scenario for taxpayers intending to contest this issue.
Considering the issue is not yet settled, it is recommended that taxpayers residing in the State of São Paulo who receive foreign donations or inheritances and wish to dismiss this taxation pursue judicial discussion on ITCMD, to avoid potential charges by the Treasury.
Our tax team is available to provide clarifications and advice on the topic discussed.
Co-authored by: Phillipe da Cruz Silva and Lívia Mauerberg Muscar
