The majority of the Plenary of the Supreme Court (STF) established, in February, the theory that states and the Federal District cannot collect Transmission Tax on Donations and Inheritance (ITCMD) on donations and inheritances received from abroad before the Brazilian Congress regulates the issue through a complementary law.

The theory was established in the judgment of Extraordinary Appeal No. 851,108 (Topic 825), which occurred under the general repercussion arrangement {for reviewing appeals} and, therefore, with binding effect. Most Justices (7 x 4) concluded that states and the Federal District cannot institute collection by their own law.

According to the decision, the Federal Constitution provides that it is incumbent on federal supplementary law, and not to ordinary state laws, to regulate the matter and, to date, there has been no complementary law on the subject. Therefore, the states and the Federal District are prevented from requiring payment of ITCMD in these situations.

In the specific case, the Supreme Court reviewed an appeal brought by the State of São Paulo against a decision by the Court of Appeals of São Paulo (TJ-SP) that found article 4 of São Paulo State Law No. 10,705/00 to be unconstitutional. The provision provided that the state could charge the ITCMD on donations and inheritance from abroad received by people residing in the state.

Despite the favorable understanding of taxpayers, the majority of Supreme Court Justices (9 x 2) opted for the proposal to soften the effects of the decision. Thus, it will be valid for facts that occurred after publication of the judgment and for facts discussed in lawsuits not yet finalized at the time of publication of the judgment, which has not yet occurred and should be analyzed to confirm the position adopted by the court.

In summary:

Taxable events prior to publication of the judgment Taxable events after publication of the judgment
If there is state law instituting the collection, there is a risk of charging of ITCMD. ITCMD may be charged only if there is a federal complementary law regulating the matter and state law instituting the tax.
Taxpayers who have already paid the ITCMD will not be able to recover the amounts paid.
If the taxpayer already has a legal action in progress to discuss the issue, there should be no charge of ITCMD.


The decision is extremely relevant in the planning of assets and succession so that increasingly structures abroad are used to hold assets, as well as succession vehicles, such as trusts and foundations, whose beneficiaries are Brazilian. In addition, there are many Brazilians living abroad.

In cases where donors or deceased persons are domiciled abroad, the property inherited is located abroad or the inventory is carried out outside Brazil, there will be no levy of inheritance or donation tax.

The trial has already had an impact on the Legislative Houses: on March 17, Complementary Bill No. 37/21, authored by Congressman Hildo Rocha, was submitted with the aim of filling the gap of subsection III, paragraph 1, of article 155 of the Federal Constitution, which was highlighted in the judgment by the Supreme Court.

The bill presented provides that the ITCMD institution will be responsible for:

  • stating where the inventory or probate is processed, or the donor is domiciled, with respect to real property, personal property, securities, or receivables located abroad (subsection II and paragraph 1 of article 2 of the bill);
  • the jurisdiction where the beneficiary of the assets or rights is domiciled, when the donor is domiciled or resident abroad or if the deceased has his inventory processed abroad (paragraph 2, subsections I and II, of article 2 of the bill);

The bill has not yet been processed by the House of Representatives.


 The article was written in conjunction with the firm's entire Tax team.