The new opinion was unveiled on Monday (8) by the working group (GT) created by Lower House Speaker Arthur Lira. Congressman Mauro Benevides was appointed general rapporteur, among the seven members of the GT.

According to the text, the ITCMD, which is levied on inheritances and donations, will be collected on “financial investments funded as private pension plans or any other type of financial investment or investment, whatever the type of guarantee.”

Two exceptions will apply: insurance plans, similar to life insurance, will not be levied, as well as amounts that have been allocated to VGBL-type plans more than five years from the occurrence of the triggering event. That was a middle ground reached by the working group. Congressman Pedro Campos, a member of the GT, admitted that not all states agreed with the five years.

Also according to the opinion, in the event the plan is transferred to heirs, the tax rate would be calculated based on the amount transferred and must be “supplemented upon transfer of the remainder of the assets and rights, adding the values of the assets previously transferred and deducting the ITCMD values already collected, observing the progressiveness of the rates provided for in each state or district legislation based on the total value of the share or legacy”.

Mr. Campos argued that it is necessary to levy pension plans, as they are used as a tax planning tool to avoid taxes when transferring inheritance.

Another new feature is that the text makes it optional for municipalities to bring forward the timing for levying the real estate conveyance tax (ITBI). According to Mr. Benevides, the text ensures “legal robustness” to a practice that some municipalities have already been adopting by changing the tax rate depending on when the tax was collected.

Congressman Pedro Campos highlighted that the working group relies on the municipalities’ common sense to understand when tax collection may or may not be brought forward. Mr. Campos points out to the risk of accepting secret contracts that will not come into force and thus the tax will never be paid, arguing that the practice is harmful to society.

The government’s text included a change by bringing forward the timing of the ITBI collection. The government had indicated a “change in the triggering event.” Now, the working group text opens the possibility of bringing the tax forward.

The opinion also says large wealth may be charged the maximum rate of the ITCMD, yet to be defined by the Senate. However, this charge will be “optional,” as there will be no punishment if it is not implemented by specific state law. The definition of “large wealth” will also be up to each state. According to Congressman Pedro Campos, the intention of including this provision in the text was to encourage tax collection but the regulation was left up to the states.

Mr. Campos says the opinion is now ready to be sent to the Lower House floor vote. The decision, however, will be up to Speaker Arthur Lira and party leaders, he said.

“I think it will be simpler to vote on this text than on the other bill on the reform regulation,” rapporteur Mauro Benevides said. “As our text has a high degree of convergence, I think it could be voted on sooner,” he added.

Mr. Benevides said the group will start visiting Congress leaders on Tuesday (9) to unveil the opinion so that they can become familiar with the “voting mood.”

Mr. Campos said the opinion publication on Monday (8) was aimed at enabling the text to be included by Mr. Lira on this week’s agenda, before the parliamentary recess, which officially begins on Thursday (18).