The Chamber of Deputies recently approved Complementary Bill (PLP) 108/2024, a crucial milestone in the regulation of tax reform. This bill, which will now go to the Senate, establishes guidelines for the management and monitoring of the Tax on Goods and Services (IBS), which will replace the Tax on Circulation of Goods and Services (ICMS) (state) and the Tax on Services of Any Nature (ISS) (municipal). In addition to changing the tax structure, PLP 108/2024 also introduces new rules on the Tax on Transfers Causa Mortis and Donations (ITCMD).

To replace ICMS and ISS, the IBS will be adopted, a unified tax whose purpose is to simplify the Brazilian tax system by combining the aforementioned taxes currently charged. Its adoption is part of the strategy to modernize and simplify the national tax system, facilitating tax collection and calculation for taxpayers, which is one of the central points of the new tax reform.

The purpose of adopting the IBS is to reduce the number of taxes levied on goods and services, which will simplify tax obligations for both companies and consumers, boosting economic activity. Its management will be coordinated between states and their respective municipalities, respecting the autonomy of each of these federative entities, but with a more centralized and uniform approach.

Despite the simplification of consumption taxes, PLP 108/2024 also introduces changes to the State Tax on Inheritance and Donations (ITCMD), which is levied on inheritances and donations. One of the main new features is the exclusion of its levies on payments for supplementary private pension plans, such as PGBL and VGB. As a result, investments in private pension plans will become more advantageous, as these amounts will no longer be considered in the tax calculation basis, benefiting the taxpayer.

Another relevant issue is the introduction of the rule for recalculating the tax rate at a second time of transfer of assets due to death. When financial investments are transferred to heirs at a time prior to the transfer of other assets, the total value of the assets transferred will be added together for the progressive application of the tax rate. In this regard, the intention is to treat the transfer of large inheritances in a more balanced manner, applying a differentiated taxation regime.

The changes introduced by PLP 108/2024, regarding the incidence of ITCMD, are not limited to inheritance, but also encompass donations. With the new regulation, corporate acts involving the transfer of share control will not be subject to ITCMD taxation. The bill establishes that corporate transactions that result in disproportionate benefits for a given partner or shareholder will not be considered a taxable event. An example cited in the discussions of the bill would be the transfer of shares between members of the same family, especially if the partner is close to death, without there being a justifiable consideration for such transfer.

PLP 108/2024 is an important step in regulating tax reform, whether by establishing the IBS as a simpler and more efficient tax compared to the ICMS and ISS; or by changes related to the collection of the ITCMD. The bill is still pending approval by the Senate, but it already represents a step forward in modernizing and simplifying the Brazilian tax system to make it more efficient and less costly.