Attention: possible changes to the Money Laundering Law

A debate started this month through public hearings on the drafting of a preliminary bill of law of the possible reform of the Money Laundering Law (Law No. 9,613 / 98, amended by Law 12,683 / 2012). The revision of the legislation will be incumbent on a commission formed by legal scholars and representatives of the Judiciary and the public attorney office, which will be chaired by the Minister of the Superior Court of Justice (STJ), Reynaldo Soares da Fonseca.

The main objective is to explore alternatives for greater efficiency in the use of resources and the application of preventive measures for sectorial market risks.

An important issue to be analyzed by the commission will be the possibility of including criteria not yet addressed by the Money Laundering Law, but already requested by financial institutions and in due diligence processes. An example of such criteria is the obligation to identify the final beneficiaries and people that are politically exposed.

The debate on possible changes to the law – seeking an expansion in the list of obligations and strengthen preventive measures – reinforces the idea of the implementation of stricter internal control systems in companies. Thus the importance of compliance programs to enable more effective control and inspection over improper conduct and financial crimes.

In addition to preventing any illegal activities, compliance programs implemented in companies are treated in M&A transactions as a strong indication of suitability. The greater the rigidity of internal controls, the greater the company’s ability to fulfill the obligations provided for in the legislation; and the lower the risk of liability for any illegal acts committed by its employees (including money laundering practices, against the National Financial System and others related to corruption). Thus, it is urgent for partners / shareholders and administrators to seek the necessary means for structuring an adequate compliance program to be implemented in those companies that do not yet have one.

Finally, it remains for us to await the changes that will be proposed to the current Money Laundering Law to better analyze the impacts on the day-to-day lives of companies.

By Luiza Martinez, lawyer at Candido Martins Advogados


Understanding about ITCMD scares anyone who wants to pay real estate in companies

The São Paulo State Tax Department (Sefaz-SP), in response to Consultation No. 22,070/2020, sent a message to taxpayers in São Paulo. In an unpretentious manner, Sefaz-SP analyzed a hypothetical case to present its understanding that there is an incidence of State tax on donation and inheritance(ITCMD) on the transfer of property for payment of share capital of a company with more than one partner if there is a difference between the cost value and the market value of the asset.

That’s right: No mistake in the text above! The response to the consultation authorizes the ITCMD to be levied on the payment of real property in the share capital of a company if the market value of the real property is greater than the cost value used to pay in the share capital.

In the hypothetical case prepared by Sefaz-SP, two individuals (“A” and “B”), who own a property (50% each), with a cost value of R$200,000 and a market value of R$ 500,000, together with a third party (“C”), decide to incorporate a limited liability company. They established that the company’s share capital would be R$ 300,000, divided into 300,000 shares (R$ 1.00 each), so that A and B would contribute the property at its cost value (R$ 200,000) and C would contribute R$ 100,000 in cash.

Although the real property’s contribution was made at cost value (R$ 200,000), the company’s market value would be of R$ 600,000 (R$ 500,000 for the real property and R$ 100,000 in cash), of which A, B and C would have equal shares in the amount of R$ 200,000 each, if appraised at market value. The inspection then claims that A and B suffered, in this operation, an equity loss of R$ 50,000 each.

On the other hand, the response explains that C would have had an increase in its equity, since it contributed R$ 100,000 and its shares would have a market value of R$ 200,000. Such facts led the tax inspection to issue the consultation in the sense that all the elements that would characterize a donation would be present. In other words, partners A and B would have donated this additional amount to C, thus giving rise to the application of the ITCMD tax.

The inspection concludes its orientation pointing out that the administrative authority would have the competence to deconstruct acts that aimed to hide or simulate legal transactions with the objective of practicing tax evasion. However, notwithstanding the fact that such case being analyzed is hypothetical, the tax inspection cannot punish the taxpayer under the mere argument that there was a simulation.

There is no taxable event of the ITCMD tax in the case presented. There is no donation. Donation consists of a unilateral act that is linked to the donor’s liberality, which is not identified in the specific case. Even if we assume that C had an increase in its equity, A and B received the quotas in exchange for its contribution to the share capital. It is a sequence of wrongful interpretations and wrongful use of legal norms and jurisprudence. Tax planning within legal limits is possible and recommended. This consultation gives an idea of a situation that does not exist. “Pigeon carrier” of something suitable is welcome. Haunting taxpayers with hypothetical facts and with distorted norms is, at the very least, reckless and should be excluded and corrected immediately.

By Maria Paula Carvalho Molinar, lawyer at Candido Martins Advogados