The Meaning of “Disposal” Operation for Income Tax Purposes

Abstract

In some provisions of the tax law, the term “disposal” for the purposes of defining transactions and the moment of the corresponding taxation is used in the law of income tax applied for individuals, legal entities or even in the financial and capital markets. In this sense, considering that it is a concept provided as well in the Civil Law, this paper discusses whether the tax legislation should be attached to that concept (of private law) or if there would be a tax concept, created by the legislator, for the purposes of taxation. In order to analyze this question, the discussions of the autonomy of Tax Law was first analyzed, when it was demonstrated that the tax law could create his own institutes (autonomy to do so) and even change private law institutes (provided it does so expressly); however, if it uses a private law concept, the law cannot change it in the definition of tax effects. Based on this, it was demonstrated that disposal, in Private Law (Civil Law), represents a type of operations that comprise the transfer of ownership of a good, based on private autonomy of the parties. In this sense, we verify that the tax law used the term “disposal” in the exact sense of Private Law, since it did not change the institute in expressly. Thus, it was demonstrated that, when the tax law intended to create his own institute (Law N. 7,713), it was provided some operations that go against the taxation of income tax (expropriation and promise of alienation), which does not support the argument that an own institute was created. Beyond that, using the term “award”, it was shown that it is a procedural law institute that represents a transfer of ownership of the property, resulting from a private autonomy act of the parties, such as the alienation also provided for in the Civil Procedure Code. With that, it was made clear that the tax law, until the present moment, including in Law n. 12,973, did not create its own Tax Law institute of “disposal”, having used the institute as provided for in Private Law.