11/07/2022
The calculation basis of the Real Estate Transfer Tax (ITBI) has been the topic of constant discussions in the brazilian judiciary.
On the subject, taxpayers argue that the tax should be collected based on the declared value in the operation or, at least, based on the market value used to determine the value of the Urban Tax (IPTU).
However, the municipalities argue that the tax should be collected on the basis previously arbitrated by them for this purpose (ITBI’s nominal value), which, as a rule, is much higher than the base intended by the taxpayer
In March of this year, when analyzing the issue in a Appeal, the Superior Court of Justice (STJ) concluded that the ITBI tax should be based on the value of the property transmitted under regular market conditions.
The Superior Court has also defined that the value of the transaction declared by the taxpayer has the presumption that it’s compatible with the market value, so that, it would be up to the municipalities to establish their own administrative procedure to rule out this presumption, being forbidden to arbitrate previously the values.
The decision resulted in a multiplication of lawsuits claiming the restitution of the amounts paid for ITBI, since, until then, the tax had been collected based on the value previously arbitrated by the municipalities.
The issue has taken on a new chapter, since in a recent decision, handed down on October 21, 2022, the Vice President of the STJ, Justice Og Fernandes, admitted the Extraordinary Appeal propose by the São Paulo’s Municipality, sending to the Federal Supreme Court (STF) the case that was subject of analysis in a Repetitive Appeal.
Now, under growing expectations, with the discussion having arrived at the STF, taxpayers will need to follow the developments of the case, to identify the risks or opportunities to save on this tax.
Our tax team is available to provide more information and guidance on these and other topics.
Co-authored by Phillipe da Cruz Silva and Guilherme Rodrigues de Matos.
