CARF authorizes the use of agio for tax discount
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“Conselho Administrativo de Recursos Fiscais (CARF)” (Adminstrative Secretary for Tax Appeals) has decided in favor of the acts of “Receita Federal” (Brazilian Federal Tax Secretary) in the cases in which third parties use the agio generated in the incorporation of a company.

The agio, amount paid for the future income of the acquired company, is used for the discount of “Imposto de Renda - IR e Contribuição Social sobre o Lucro Líquido – CSLL” (Income Tax- IR and Social Contribution on the net income- CSLL). The Treasury allows this tax benefit just for those who have paid for the agio in the operation of acquisition, thus acting all those that incorporated the investor and took advantage of the agio generated in the previous acquisition in order to pay less tax. Nevertheless, CARF has stated that the legislator did not establish order in the sequence of the acts of fusion, cession, or incorporation, “not being responsibility of the interpreter the prohibition of what the law has not banned”

“Fazenda Nacional” (Treasury Department) has appealed the before mentioned decision. Such appeal has not been accepted, and for this reason the Treasury had to ultimately appeal to the “Câmara Superior de Recursos Fiscais – CSRF” (Tax Appeal Superior Chamber). Such decision is now being used as an argument in the administrative appeals of the companies evaluated by actuary.

It is hereby important to mention that the acts have been placed not only in companies belonging to the same economic group but also, in companies that belong to different economic groups. In the latter, the Treasury, by means of a limited interpretation of the term “acquired”, understands that only the company that has paid the agio is the one that has the right to use such benefit. In the case of companies belonging to the same group, the Treasury understands that it is a mere simulation, an operation without any other economic objective than the one of paying less tax. In this case, CARF has already expressed its opposition against the use of agio.


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