Taxation of the Fair Value of Assets in the Return of Share Capital

Abstract

Since the publication of Law No. 11638/2007, the Brazilian accounting system has undergone major changes to adapt itself to the international standards; among them, the possibility of valuation at fair value of certain assets stands out. Such modifications, however, may not lead to the taxation of presumed and unrealized gain, as intended by the Brazilian Internal Revenue Service in the Consultation Solution No. 415/2017. Thus, paragraph 1 of article 13 of Law No. 12973/2014, which determines the taxation of gains arising from fair value valuation as the asset is realized, must be interpreted in a way that preserves the tax as set forth in article 22 of Law No. 9249/1995, as well as in line with the constitutional tax principles and witharticle 43 of the National Tax Code.